Immigration tightening constrains labor

Reduced immigration and restrictive policies are linked to slower hiring and workforce shortages, affecting logistics, agriculture, construction, and services. Analyses project legal immigration could fall 33–50% (1.5–2.4 million fewer entrants over four years), raising labor costs and operational risk.

Defense Sector Expansion and Privatization

Israel’s defense industry is expanding internationally, with IPOs of key firms like IAI and increased exports to Europe amid heightened demand. Privatization and global partnerships enhance competitiveness, but regulatory and labor hurdles, as well as security considerations, shape the sector’s trajectory.

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.

Fiscal Stabilization and Policy Reform

South Africa is nearing a fiscal turning point, with debt-to-GDP stabilizing and primary surpluses returning. Improved fiscal credibility has strengthened the rand and bonds, but sustaining reforms and managing coalition politics remain critical for long-term investor confidence.

Digital regulation tightening for platforms

Australia’s under‑16 social media ban (fines up to A$49.5m) and broader eSafety scrutiny are forcing stronger age assurance, content controls and reporting. Multinationals face higher compliance costs, data-handling risk, and potential service changes affecting marketing, customer support and HR.

Critical Minerals Supply Chain Security

Japan is urgently strengthening critical mineral supply chains through alliances with the UK and other partners, responding to China's export controls and global supply shocks. These efforts are vital for sustaining advanced manufacturing, energy, and defense sectors, directly impacting supply chain resilience and investment strategies.

De-dollarisation and local-currency settlement

Russian officials report near‑100% national‑currency use in trade with China and India and ~90% within the EAEU, reducing USD/EUR reliance. For foreign firms, FX convertibility, hedging, and repatriation complexity rise, especially where correspondent banking access is constrained.

Tariff rationalisation amid protectionism

Recent tariff schedules cut duties on many inputs, improving manufacturing cost structures, while maintaining high protection on finished goods in select sectors. This mix changes sourcing decisions, compliance requirements, and effective protection rates, influencing export orientation versus domestic-market rent-seeking.

IMF-linked reforms and fiscal tightening

Ongoing engagement with the IMF and multilaterals supports macro stabilization but implies subsidy reforms, tax enforcement, and constrained public spending. These measures affect consumer demand, project pipelines, and pricing. Investors should track review milestones that can unlock financing and market confidence.

TCMB makroihtiyati sıkılaştırma

Merkez Bankası, yabancı para kredilerde 8 haftalık büyüme sınırını %1’den %0,5’e indirdi; kısa vadeli TL dış fonlamada zorunlu karşılıkları artırdı. Finansmana erişim, ticaret kredileri, nakit yönetimi ve yatırım fizibilitesi daha hassas hale geliyor.

Strategic manufacturing: chips and electronics

Budget 2026 expands India Semiconductor Mission 2.0 and doubles electronics component incentives to ₹40,000 crore; customs duties are being rebalanced (e.g., higher display duty, lower components) to deepen local value-add. Impacts site selection, supplier localization, and capex timelines.

EU market access and GSP+ scrutiny

Pakistan’s duty-free access under EU GSP+ (extended to 2027) is pivotal for textiles and apparel, but remains linked to 27 conventions and rights monitoring. Any compliance slippage or preference erosion would raise landed costs and disrupt buyer sourcing decisions.

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.

Expanding U.S. secondary penalties

Washington is tightening enforcement on Iranian trade through new sanctions targeting oil/petrochemical networks and a 25% tariff threat on countries trading with Iran. This elevates compliance costs, raises counterparty risk, and may force rapid supplier requalification.

Automotive Sector Crisis and Chinese Competition

The German automotive sector faces overcapacity, declining exports, and fierce competition from Chinese EVs. Structural adjustments, supply chain localization, and rapid technological change are reshaping the industry, with job losses and investment risks affecting the broader manufacturing ecosystem.

ESG and Sustainability Compliance Rising

ESG-linked investment products, green finance, and stricter environmental standards are gaining traction, driven by both government policy and investor demand. Companies face increasing pressure to align with global ESG norms, impacting access to capital and international partnerships.

Fiscal outlook and debt path

Brazil’s primary deficit was R$61.7bn in 2025 (0.48% of GDP), while gross debt ended near 79.3% of GDP and is projected higher. Fiscal rules rely on exclusions, raising risk premiums, FX volatility and financing costs for investors and importers.

Energy Infrastructure Expansion and Security

Egypt is expanding its power grid and accelerating the El Dabaa Nuclear Power Plant project to meet rising demand and reduce losses. Reliable energy infrastructure is essential for industrial growth, but technical and financial inefficiencies still pose operational risks.

Mining Sector Emerges as Strategic Pillar

Saudi Arabia is investing $110 billion to develop its $2.5 trillion mineral reserves, including rare earths, gold, and copper. The Kingdom seeks to become a regional processing hub, partnering with US firms and reducing global supply chain dependence on China for critical minerals.

UK-EU supply chain re-fragmentation

EU ‘Made in Europe’ industrial rules risk excluding UK firms from subsidised value chains, potentially raising costs and disrupting integrated automotive, advanced-tech and green-energy supply chains spanning Britain and the continent, complicating investment planning and post‑Brexit trade resets.

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.

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.

Energy exports and LNG geopolitics

US LNG is central to allies’ energy security, but export policy and domestic political pressure can affect approvals, pricing, and availability. For industry, this shapes energy-intensive manufacturing siting, long-term contracts, and Europe-Asia competition for cargoes, with knock-on logistics and hedging needs.

Energy planning and power constraints

Vietnam is revising national energy planning to support 10%+ growth targets, projecting 120–130 million toe demand by 2030 and rapid renewables expansion. Businesses face execution risk in grids, LNG logistics, and permitting; power reliability remains a key site-selection factor.

BOJ tightening and yen swings

Rising Japanese government bond yields and intervention speculation are increasing FX and funding volatility. Core inflation stayed above 2% for years and debt is about 230% of GDP, raising hedging costs, repatriation risk, and pricing uncertainty for exporters and importers.

Regional Integration and Trade Bloc Leverage

South Africa’s leadership in the African Continental Free Trade Area and regional infrastructure partnerships enhances its role as a gateway to Africa, supporting supply chain diversification and positioning the country as a hub for multinational investment and trade.

Infrastructure Expansion and Social Conflict

Major infrastructure projects, such as the Santos-Guarujá tunnel and Amazon waterways, are advancing, attracting foreign investment and improving logistics. However, these projects face social resistance, especially from Indigenous groups, due to environmental and land rights concerns.

5G/6G and private networks

Nokia-led investment in 5G Advanced, edge automation and forthcoming 6G trials underpins private wireless deployments for factories, ports and training sites. International operators and vendors can partner, but must plan for interoperability, cybersecurity certification and long R&D-to-revenue cycles.

Bahnnetz-Sanierung stört Logistik

Großbaustellen bei der Bahn (u.a. Köln–Hagen monatelang gesperrt) verlängern Laufzeiten im Personen- und Güterverkehr und erhöhen Ausweichkosten. Für internationale Lieferketten steigen Pufferbedarf, Lagerhaltung und multimodale Planung; zugleich bleibt die Finanzierung langfristiger Netzmodernisierung unsicher.

Geopolitical Risks and Trade Diversification

Turkey faces challenges from shifting global alliances, new EU and India FTAs, and regional tensions. Trade with India declined by over 14% in 2024–25, and exclusion from new FTAs limits market access, highlighting the need for diversified export strategies.

Renewables, batteries and green hydrogen

Large-scale clean-energy buildout is accelerating: the $1.8bn ‘Energy Valley’ project includes 1.7 GW solar plus 4 GWh storage, and a 10 GWh/year battery factory in SCZONE is planned. Green hydrogen/ammonia export plans target first shipment by 2027.

Data security and cross-border flows

China’s data-security regime continues tightening around cross-border transfers, localization, and security assessments for “important data.” Multinationals face higher compliance costs, audit exposure, and potential disruption to global IT architectures, analytics, HR systems, and cloud-based operations.

Compliance Costs and ESG Barriers in EU Trade

While the EU FTA offers tariff-free access, Indian exporters face high compliance costs from the EU’s carbon border tax and ESG standards. These non-tariff barriers could offset gains, especially for steel, aluminum, and emission-intensive sectors, requiring strategic adaptation by businesses.

Strategic Role in European Value Chains

Turkey is deeply embedded in EU value chains, especially in automotive, machinery, textiles, and electronics. Its manufacturing and logistics capacity, combined with energy corridor status, make it a strategic partner for Europe’s competitiveness and supply chain resilience.

Tariff Volatility and Legal Risk

U.S. tariff policy is highly fluid, with threatened hikes on key partners and the Supreme Court reviewing authority for broad “reciprocal” duties. This uncertainty raises landed-cost volatility, complicates contract pricing, and increases incentive for regionalizing production and sourcing.

EU Customs Union modernization momentum

Turkey and the EU agreed to keep working toward modernizing the 1995 Customs Union, with business pushing to expand it to services, digital and procurement. Progress could reduce friction for integrated value chains, but talks remain conditional on rule-of-law and climate alignment.