Domestic unrest and operational disruption

Mass protests and a severe security crackdown have disrupted commerce, port operations, and logistics, with intermittent internet restrictions. Companies face heightened workforce, physical security and continuity risks, plus reputational exposure from human-rights concerns and sanctions-linked counterparts.

Gaza ceasefire uncertainty persists

Ceasefire implementation remains fragile, with intermittent strikes, aid-flow constraints and contentious governance/disarmament sequencing for post-war Gaza. Businesses face elevated security, force‑majeure and personnel-duty-of-care risks, plus potential reputational exposure and operational volatility tied to border closures.

Ports labor negotiations and logistics fragility

Ongoing labor-contract uncertainty at key U.S. East and Gulf Coast ports heightens strike and congestion tail risks. Importers should diversify gateways, build inventory buffers, and stress-test inland transport capacity to avoid repeat disruptions and demurrage spikes.

Sanctions, export controls, compliance burden

Canada’s expanding sanctions and export-control alignment with allies increases screening requirements for dual-use items, shipping, finance and tech transfers. Multinationals need stronger KYC/UBO checks, third-country routing controls, and contract clauses to manage enforcement and sudden designations.

BoJ normalization lifts funding costs

The Bank of Japan’s cautious tightening bias—policy rate lifted to 0.75% in December and markets pricing further hikes—raises borrowing costs and may reprice real estate and equities. Firms should revisit capex hurdle rates, refinancing timelines, and counterparty risk.

Currency Stability and Market Growth

The Brazilian real appreciated 11.19% in 2025, while the Ibovespa index rose 33.7%, marking its best performance since 2016. Stable currency and booming equities enhance Brazil’s attractiveness for portfolio investment and international business expansion.

Hormuz chokepoint maritime insecurity

Heightened US-Iran confrontation is already depressing Gulf shipping activity and increasing war-risk premiums. Iran threatens disruption of the Strait of Hormuz and adjacent waterways; even limited incidents can spike freight rates, insurance, and delivery times for energy and container cargo.

Aranceles y reconfiguración automotriz

Aranceles de EE. UU. y peticiones de México para reducir tasas a autos no conformes con T‑MEC presionan exportaciones. Cierres/ajustes de plantas y potencial compra por BYD/Geely muestran reconfiguración; sube el escrutinio sobre “backdoor” chino y el riesgo de medidas.

Energy Sector Expansion and Export Infrastructure

Israel’s energy sector is expanding, with new gas contracts, export pipelines to Egypt, and increased production. Long-term contracts and infrastructure investments support revenue stability, but regional geopolitical tensions pose ongoing risks to supply and capital allocation.

Currency Shift Reduces Dollar Exposure

Russia now conducts nearly all trade with China and India in national currencies, minimizing reliance on the dollar and euro. This currency shift alters payment risk profiles, complicates cross-border transactions for global firms, and signals a long-term pivot away from Western financial systems.

Green Transition and Sustainable Investment Projects

Major projects like the $4.2 billion Giza waste-to-biofuel facility highlight Egypt’s commitment to green growth and the circular economy. Such initiatives create new investment opportunities, support job creation, and align with global sustainability standards, attracting ESG-focused investors.

Disaster and BCP-driven supply chains

Japan’s exposure to earthquakes and extreme weather is pushing stricter business-continuity planning and inventory strategies. Companies are investing in automated, earthquake-resilient logistics hubs and longer lead-time services to dampen disruption risk, affecting warehousing footprints, insurance costs, and supplier qualification.

Fiskalpolitik und Verfassungsklagen

Schuldenfinanzierte Sondervermögen treiben einen Großteil des Wachstums, zugleich drohen Rechtsrisiken: Die Grünen prüfen Verfassungsbeschwerden gegen Haushalt und Mittelverwendung. Unternehmen müssen mit Verzögerungen bei Infrastruktur- und Klimaprojekten, Förderunsicherheit sowie wechselnden Steuer- und Ausgabenprioritäten rechnen.

Санкции и вторичные риски

20-й пакет ЕС расширяет санкции: полный запрет морских услуг для российской нефти, +43 судна «теневого флота» (640), ограничения на банки и криптоплатформы, новые импорт/экспорт‑запреты. Растут риски вторичных санкций и комплаенса для глобальных цепочек поставок.

USMCA review and stricter origin

The 2026 USMCA joint review is moving toward tighter rules of origin, stronger enforcement, and more coordination on critical minerals. North American manufacturers should expect compliance burdens, sourcing shifts, and potential disruption to duty-free treatment for borderline products.

Energy security and LNG procurement

Taiwan’s import-dependent power system and plans to increase LNG purchases, including from the US, heighten focus on fuel-price volatility and shipping risk. Industrial users should expect continued sensitivity to outages, grid upgrades, and policy shifts affecting electricity costs.

Supply chain resilience and logistics

Tariff-driven front-loading, shifting sourcing geographies, and periodic transport disruptions are increasing inventory costs and lead-time variability. Firms are redesigning networks—splitting production, adding redundancy, and diversifying ports and carriers—raising working capital needs but reducing single-point failure exposure.

US Tariffs Disrupt German Exports

Recent US tariffs have led to a 9.4% drop in German exports to the US, particularly impacting the automotive and machinery sectors. The resulting volatility and unpredictability in transatlantic trade relations are forcing German businesses to seek alternative markets and reconsider investment strategies.

Local content and procurement localisation

PIF’s local-content drive exceeds ~US$157bn, with contractor participation reported at ~67% in 2025 and expanding pipelines of platform-listed opportunities. International suppliers face higher localisation, JV, and in-Kingdom value-add requirements (e.g., IKTVA-style terms) to win contracts.

Current Account Deficit and Financing

Brazil’s current account deficit reached US$68.8 billion in 2025 (3.02% of GDP), financed mainly by long-term foreign investment. While trade balances remain positive, deficits in services and primary income require ongoing capital inflows to sustain external stability.

Long-term LNG contracting shift

Japan is locking in multi-decade LNG supply to secure power for data centres and industry. QatarEnergy’s 27-year deal with Jera covers ~3 Mtpa from 2028, improving resilience but adding destination-clause rigidity and exposure to gas-demand uncertainty from nuclear restarts.

Automotive Sector Policy Shifts

The automotive industry is navigating trade tensions, policy uncertainty, and a flood of cheap imports, particularly from China. The government is considering tariff adjustments and new energy vehicle policies, with the sector’s future hinging on reform momentum and global market access.

US-Canada Trade Tensions Escalate

The US has threatened 100% tariffs on Canadian exports if Canada deepens trade with China, creating significant uncertainty for supply chains, cross-border investment, and the upcoming USMCA renegotiation. This volatility directly impacts market access and business planning for international firms.

Ports and freight connectivity upgrades

Karachi logistics is improving via DP World–Pakistan Railways Pipri freight corridor and new automated bulk-handling equipment, aiming to shift containers from road to rail and reduce turnaround times. Execution risk persists, but successful delivery lowers inland logistics costs and delays.

USMCA Review and Trade Uncertainty

The 2026 USMCA review introduces major uncertainty for Mexico’s trade and investment climate. Tensions between the US and Canada, evolving rules of origin, and potential new tariffs could reshape North American supply chains, impacting $665 billion in Mexican exports.

Upgraded EU-Vietnam Strategic Partnership

Vietnam and the EU have elevated ties to a comprehensive strategic partnership, deepening cooperation in trade, critical minerals, semiconductors, and technology. This move supports supply chain security, market access, and investment, especially as US tariffs reshape global trade dynamics.

EU accession-driven regulatory convergence

Kyiv targets EU membership by 2027, accelerating alignment on standards, customs, competition, and public procurement. For exporters and investors this can reduce long-term market access friction, but creates near-term compliance churn, documentation demands, and shifting tariff and quota regimes.

High-tech FDI and semiconductors

FDI remains resilient and shifts toward higher-value electronics and semiconductors, with 2025 registered FDI at US$38.42bn and realized US$27.62bn; early-2026 approvals exceed US$1bn in key northern provinces. This supports supply-chain diversification but increases competition for talent and sites.

Ports and logistics labor uncertainty

U.S. supply chains remain exposed to port and transport labor negotiations and anti-automation disputes, increasing disruption risk at key gateways. Importers may diversify ports, adjust routing, and carry higher safety stock, especially when tariff timing triggers demand spikes and front-loading behavior.

Foreign Investment Scrutiny and Security

US authorities have tightened restrictions on foreign, especially Chinese, investment in strategic sectors and real estate near sensitive sites. Expanded CFIUS powers and state-level laws increase compliance burdens and impact cross-border M&A and supply chain localization.

Sanctions and Decoupling from Russian Energy

The EU is phasing out Russian gas by 2027 and expanding sanctions on Russia’s defense and energy sectors. Ukraine urges further asset freezes and restrictions. This shift is reshaping regional energy markets and supply chains, creating both risks and opportunities for international operators.

Critical minerals alliance reshaping

Canberra’s A$1.2bn Critical Minerals Strategic Reserve (initially gallium, antimony, rare earths) and deeper US-led cooperation (price floors, offtakes) are accelerating non‑China supply chains, creating investment openings but higher compliance, geopolitical and pricing-policy risk for manufacturers.

India–EU FTA reshapes access

India and the EU signed a major free trade agreement expected to reduce or eliminate tariffs on most traded goods by value and deepen standards alignment. This expands market access and diversification options, pressuring competitors and influencing supply-chain site selection and investment sequencing.

Geopolitical Tensions with China

Rising military pressure and large-scale drills by China around Taiwan heighten the risk of conflict, threatening global supply chains and investment stability. Any escalation could disrupt semiconductor flows, impacting industries worldwide and potentially causing a severe global economic downturn.

Logistics capacity and freight cost volatility

Freight market tightness, trucking constraints, and episodic port/rail disruptions keep U.S. logistics costs volatile. Importers should diversify gateways, lock capacity via contracts, increase safety stocks for critical SKUs, and upgrade visibility tools to manage service-level risk.

Energy Transition and Supply Chain Realignment

Finland’s rapid shift away from Russian energy, combined with investments in renewables and thermal storage, is restructuring industrial supply chains. While this enhances energy security and sustainability, it also exposes businesses to volatility in energy prices and regulatory changes.