Low growth, rate cuts, baht

Bank of Thailand cut policy rate to 1.0% as growth is forecast around ~2% and uneven. Baht volatility and competitiveness concerns persist, amplified by safe-haven flows and oil prices, affecting exporters, tourism margins, and hedging/treasury strategies for multinationals.

LNG scarcity and power risks

Asian spot LNG markets tightened after Middle East disruptions, pushing prices sharply higher and leaving some tenders unawarded. Vietnam, a growing LNG buyer for power and industry, faces higher input costs and potential supply constraints, reinforcing the need for hedging and diversified energy sourcing.

Logistics infrastructure build-out

Egypt is accelerating port and transport upgrades—Damietta Port development, deeper channels, new berths, and major rail/metro projects—to position as a regional logistics hub. Over time this can reduce inland bottlenecks, but near-term construction disruption and contract-payment risks persist.

Forced-labor enforcement and new probes

Section 301 forced-labor probes covering ~60 partners plus ongoing CBP/UFLPA actions increase seizure, documentation, and traceability requirements across apparel, electronics, solar, and upstream materials. Companies should expect higher auditing costs, supplier churn, and potential tariffs tied to labor-governance standards.

Trade reorientation toward United States

US imports from Taiwan hit $24.7B in Dec 2025 versus China $21.1B, while Taiwan’s US trade deficit reached about $147B. AI hardware demand is driving this shift, benefiting exporters but heightening exposure to US policy, audits, and localization demands.

USMCA review and tariff risk

USMCA renewal talks starting March 16 raise material uncertainty for duty-free access across $1.6T North American goods trade. Persistent U.S. tariffs (25% trucks; 50% metals; 17% tomatoes) and possible rule changes could disrupt pricing, compliance, and investment planning.

Energy security pivots to imports

Indonesia plans to absorb oil shocks via larger subsidies and is discussing greater US energy purchases (reported US$15bn) plus LNG contracting (Masela talks narrowed to five global buyers). Volatile prices raise cost risk for industry and for energy-intensive manufacturers.

LNG mega-projects debottlenecking push

Proyek LNG Abadi Masela (US$20,9–21 miliar; 9,5 mtpa LNG) dipercepat lewat satgas debottlenecking, relaksasi TKDN, dan percepatan izin; tender EPCI/SURF berjalan, FID ditarget 2027. Ketidakpastian kompensasi lahan, AMDAL, dan biaya konstruksi tetap risiko utama.

EU–China EV trade recalibration

Europe’s anti-subsidy EV regime is shifting toward “price undertakings” with minimum import prices, quotas, and EU investment pledges. This creates a new pathway for China-made EVs while adding compliance complexity, affecting automotive sourcing, JV structures, and market-access strategy.

Russia-related sanctions policy whiplash

A 30-day waiver allowing Indian purchases of Russian oil signals potential easing, sparking political backlash and uncertainty about future enforcement. Businesses must scenario-plan for rapid re-tightening, banking/OFAC screening changes, and secondary exposure across global counterparties.

Export diversification into high-tech

Medical-device exports doubled to ~$20.55B in 2025 (about 90% to the U.S.), supported by clusters in Baja California, Sonora, Chihuahua and Guadalajara. This deepens North American value chains, but raises compliance demands on quality systems, traceability and USMCA origin documentation.

Energy advantage from nuclear revival

France’s abundant nuclear and renewable generation is cushioning power-price volatility versus peers, supporting industrial competitiveness and cross-border exports. The nuclear buildout (six EPRs) and life-extension plans require major supply-chain capacity and ~100,000 hires by 2035.

Shadow fleet shipping enforcement scrutiny

UK delisting of a British financier linked to Russia’s ‘shadow fleet’ underscores evolving sanctions enforcement and review processes. Maritime, energy and finance firms must intensify beneficial‑ownership checks, vessel tracking and trade‑finance controls to avoid inadvertent violations.

AI chip export “rationing”

Washington is considering a new AI‑chip export framework that ties large shipments (100,000–200,000+ chips) to government assurances, monitoring, and even site visits, potentially swapping controls for foreign investment in US data centers. Allies’ procurement timelines and compliance burdens would rise.

Contentious Amazon offshore drilling

Petrobras’ Foz do Amazonas drilling faces intense environmental scrutiny: ANP cited critical safety noncompliance (potential R$0.5–2m fine) and Ibama fined R$2.5m for drilling-fluid discharge. Licensing outcomes affect energy investment, ESG risk, and project timelines.

War-risk surcharges on trade

Shipping lines and cargo handlers are imposing war-risk and emergency surcharges linked to regional hostilities, with reported costs rising sharply per container. This increases export/import unit costs, lengthens lead times and challenges just‑in‑time supply chains.

Energy export expansion vs carbon rules

Energy diversification is constrained by unsettled industrial carbon pricing and methane rules. Canadian Natural paused an C$8.25B oil-sands expansion citing policy uncertainty, while Ottawa-Alberta talks target raising effective carbon price toward C$130/tonne and tying new pipelines to CCS progress. Investment timing remains volatile.

Auto transition, supply-chain reshoring

Germany’s auto ecosystem is under strain from slow EV uptake and high domestic costs. Baden‑Württemberg lost 32,450 metal/electrical jobs in 2025; Bosch plans ~13,000 cuts by 2030. Production localization to North America/China pressures suppliers and new investment decisions.

Risco fiscal e execução orçamentária

Contas federais iniciaram 2026 com superávit primário de R$86,9 bi, mas despesas crescem mais que receitas e o arcabouço permite exclusões que podem mascarar déficit (~R$23,3 bi). Orçamento de R$6,54 tri amplia emendas (R$61 bi), elevando incerteza regulatória e de projetos.

Energy Import Shock and FX Pressure

Rising oil/LNG prices and reported supply cuts heighten Pakistan’s import bill and inflation risk, complicating FX management. Businesses face higher transport and production costs, potential rationing, and renewed pressure on the rupee, pricing and working-capital needs.

Macro volatility: weak won, oil inflation

A sharply weaker won and oil-price shock are lifting import costs; Korea’s import price index rose 1.1% m/m in February, while USD/KRW tested post-crisis highs. The Bank of Korea is constrained on rate cuts, increasing financing and hedging complexity for foreign investors.

FDI screening may partially ease

Government is reviewing Press Note 3 (FDI from bordering countries) and considering a de minimis threshold for small-ticket approvals, while keeping the regime intact. This could accelerate venture funding and JVs, but leaves heightened national-security scrutiny and deal-timing uncertainty.

Inflation distortions and tariff controls

Headline CPI remains negative for 11 months due to capped electricity (3.88 baht/unit) and cheaper fuel/food, while core inflation stays positive. Price controls and subsidy tools can change quickly if oil rises, complicating contract indexation and operating-cost forecasting.

Foreign property ownership liberalization

Since late Jan 2026, foreign non-residents can own property in government-approved zones under the updated Real Estate Ownership Law (with extra restrictions in Mecca/Medina). This supports FDI, HQ setups, and project financing, while increasing due diligence on zoning and approvals.

Yen volatility and policy normalization

BoJ normalization and potential FX intervention are back in focus as yen weakens near 157–160/USD. Rate-hike timing hinges on wages and inflation. Volatility affects import costs, hedging, repatriation, and pricing for exporters and Japan-based multinationals.

Rate-cut cycle amid oil shocks

Copom began easing with a 25bp Selic cut to 14.75% after holding 15% since mid‑2025, but flagged heightened external uncertainty and fuel-driven inflation risks. High real rates still constrain credit and capex, while volatility in oil and FX complicates hedging and pricing.

Energy import shock and logistics

Middle East conflict and Hormuz disruptions are lifting fuel, freight and insurance costs. Pakistan raised petrol/diesel by Rs55 per litre and officials warn the oil bill may rise $600m monthly; LNG supply risks add outage and transport-cost uncertainty.

US tariff pressure, Section 301

Washington’s Section 301 probes and shifting tariff tools are raising uncertainty for Korean exporters and inbound investors. Seoul’s $350bn U.S. investment framework and “excess capacity” scrutiny could trigger targeted duties, compliance costs, and supply-chain re-routing decisions.

Housing and planning constraints on growth

Housebuilding targets are under pressure as net additions are forecast to dip to 220,000 in 2026–27 and planning reforms may not lift supply until after 2030. New transparency rules on land options may add compliance burden. Construction costs, labour shortages and local infrastructure bottlenecks affect site strategy and logistics demand.

US trade scrutiny and tariffs

Vietnam’s US surplus hit $19B in Jan 2026, with exports up 53% to >$20B and 2025 surplus $178B. Washington alleges Chinese transshipment and has launched Section 301 actions; potential penalties include tariffs up to 40%, heightening compliance and sourcing risks.

Oil-price spike, subsidy uncertainty

With oil above US$100/bbl, Indonesia plans to absorb shocks via a 2026 energy-subsidy envelope (~Rp381.3tn) while keeping deficit below 3% of GDP. Higher subsidies, spending cuts (including flagship programs), and rupiah weakness complicate cost forecasts for importers and industry.

Currency volatility and hot-money

Portfolio outflows of roughly $2–$5bn amid regional conflict pushed the pound to record lows beyond EGP 52/$, increasing FX hedging costs, repricing imports, and raising transfer/pricing risks for multinationals relying on local costs and revenues.

AI chip export controls go global

Draft U.S. rules could require licenses for most AI-chip exports, even to partners, with conditions like anti-clustering software, monitoring, site visits, and investment in U.S. data centers for large shipments. This reshapes tech supply, cloud expansion, and ally relations.

Customs union modernization push

Ankara is prioritizing customs-union modernization amid deeper EU-Türkiye trade (reported $233B in 2025). Potential updates could reshape rules-of-origin, services, public procurement, and dispute mechanisms, influencing market access strategies, investment siting, and supplier qualification.

Supply-chain resilience and corridors

India is positioning as a ‘China+1’ production base via manufacturing incentives and trade agreements, but infrastructure and corridor execution remain uneven. Businesses should expect ongoing capex in ports/industrial corridors and localized supplier development, alongside episodic logistics bottlenecks.

Battery and EV demand reset

Cooling U.S. EV demand and policy rollbacks are pressuring Korean battery makers’ U.S. operations, prompting layoffs, JV changes, and a pivot toward energy storage systems. This raises counterparty, utilization, and timing risks for suppliers tied to North American electrification projects.