US tariffs disrupt export planning

US trade policy remains a major source of uncertainty for German exporters despite the EU-US Turnberry framework. More than 60% of German industrial firms report negative tariff effects, with automotive exposure especially high, delaying investment and complicating pricing, sourcing and market planning.

Regional security risks persist

SADC discussions highlighted continuing instability in eastern DRC, sporadic attacks in Mozambique’s Cabo Delgado and political uncertainty in Madagascar. These security risks matter for South African trade and investment because they threaten transport corridors, regional demand and cross-border project execution.

Budget stress threatens policy

France’s fiscal position is deteriorating, with the state deficit reaching about €106.8 billion in first-half 2026 and debt-service costs rising to €34.5 billion. This increases the probability of austerity, tax changes and delayed public spending affecting investment planning.

Fiscal Expansion Amid Investor Confidence Concerns

The 2027 budget targets 6% growth with Rp4,097 trillion spending and 2.4% deficit, but two major rating agencies hold negative outlooks. Prabowo's approval dropped to 51%, consumer confidence declined three consecutive months, and interest payments exceed 15% of government revenue through 2027.

Military-led diplomacy reshapes business risk

Pakistan’s foreign policy is increasingly centered on military-led ties with Saudi Arabia, China and the United States, including defense commitments and crisis mediation. This may unlock short-term financial support, but it also heightens geopolitical exposure, sanctions sensitivity and policy unpredictability for international firms.

Suez route insecurity deepens

Red Sea and Bab el-Mandeb threats continue to undermine canal-linked trade. Reports say Suez revenues fell from $10.25 billion in 2023 to about $4 billion in 2024, with ship transits dropping from over 26,000 to just above 13,000.

China risk threatens logistics

Rising Chinese gray-zone pressure has direct implications for shipping, insurance, and cargo flows. Reports highlighted Chinese coast guard activity near Taiwan and scenarios involving customs-style inspections of vessels, raising contingency concerns for maritime access, freight reliability, and trade continuity.

Myanmar border trade reopens

Thailand and Myanmar are reopening key border channels, including the Second Friendship Bridge, while targeting bilateral trade of $12 billion from $7.4 billion. The reset could revive border logistics, labor flows and energy trade, but conflict-related disruption remains material.

Hormuz Disruption Threatens Energy Flows

Strait of Hormuz disruption has sharply tightened Japan’s energy position, with around 90% of crude oil and 11% of LNG normally transiting the route. Reported crude-import declines of 64% underscore vulnerability for power-intensive industries, shipping costs and winter energy security.

Indonesia trade corridor expansion

Thailand is deepening commercial integration with Indonesia through a 2026–2030 strategic roadmap, a planned Joint Trade Commission, and bilateral trade targets of US$20–23 billion by 2030, creating new opportunities in market access, standards alignment, and regional sourcing.

Iran Gas Contract Uncertainty

Turkey’s 25-year gas import agreement with Iran expired on July 29 without renewal talks, reportedly stalled by the US-Iran war. Iran supplied 7.7 bcm in 2025, or 13.2% of imports, leaving buyers exposed to pricing and supply uncertainty.

North Sea approvals unresolved

Government consultations on Jackdaw and Rosebank have intensified uncertainty over UK oil and gas investment. Industry argues Jackdaw could supply more than 6% of UK gas at peak and support jobs, while delays risk deterring capital and weakening energy security.

State footprint remains investment constraint

The IMF and recent legislation both highlight Egypt’s large state role. The new Future of Egypt authority can control land, companies and tax-exempt zones, potentially reshaping competition, procurement access, and regulatory predictability across logistics, agriculture, energy and industry.

Tighter foreign investment screening

France lowered the review threshold for non-European investors in sensitive listed companies from 25% to 10%, covering AI, semiconductors, energy and healthcare. Faster ten-day initial decisions help, but cross-border deals now face higher approval risk and diligence burdens.

US tariff pressure on exporters

Thailand faces elevated U.S. tariff exposure under new Section 301 actions, with reporting indicating a 12.5% rate for countries including Thailand. This raises cost pressure for exporters and could affect investment planning, sourcing decisions, and trade-route optimisation.

Defense export rules are easing

The Knesset approved the first phase of defense export licensing reform, shortening registration and marketing-license timelines, digitizing procedures, and standardizing product documentation. Faster approvals should support exporters and suppliers, while increasing the strategic importance of Israel’s defense manufacturing ecosystem.

Shipbuilding ties with America

Korean firms are deepening their role in US shipbuilding through investment and potential acquisitions, including Hanwha’s bid for Austal USA. Washington’s new openness to allied yard participation could expand Korean industrial opportunities, but execution depends on regulatory approvals and political support.

Investor confidence in hydrocarbons

The petroleum ministry says cleared partner arrears, 19 signed agreements worth at least $823.1 million, and 13 more planned agreements above $1 billion are reviving exploration. This improves Egypt’s appeal for foreign capital, field services, and long-cycle energy investment commitments.

Automotive and EV value chains

Recent reporting links Thailand’s role as a regional automotive assembly hub to efforts to build joint battery and electric-vehicle component value chains, indicating continued importance of Thailand for manufacturers assessing ASEAN production footprints and supplier diversification.

Gas storage and export push

Turkey says its Tuz Golu and Silivri gas storage sites are at 100% fullness and plans additional FSRUs, while also exploring exports to Europe from Sakarya gas. Stronger storage resilience and export ambitions may support energy-intensive industry and cross-border supply contracts.

ASEAN integration offsets external shocks

Indonesia is strengthening regional economic ties, notably through a new Thailand strategic partnership roadmap and broader ASEAN trade ambitions. Bilateral trade with Thailand is around US$17 billion, while energy, food-security and supply-chain cooperation may help firms hedge global tariff and logistics volatility.

Automotive Sector Restructuring Intensifies

Germany’s auto industry is entering deeper restructuring as BMW plans 8,000 job cuts and Audi faces plant-closure unrest. Chinese competition, weak China-market performance and tariff exposure are pressuring costs, production footprints, supplier volumes and investment decisions across Europe’s automotive value chain.

Pharmaceutical Supply Chain Reshoring

Trump threatened 100% duties on generic drug manufacturers that do not relocate production to the United States by 2028, putting India-, Europe-, and China-linked pharmaceutical supply chains under strategic review for manufacturing and investment reconfiguration.

Utility and infrastructure intervention

Early signals of broader state intervention, including temporary electricity VAT cuts and discussion of renationalizing rail, water, energy and infrastructure, are increasing policy uncertainty. Businesses face potential changes in pricing, regulation, ownership structures and the investment case for UK infrastructure assets.

North American Trade Talks Intensify

US negotiations with Canada ahead of proposed 50% tariffs on selected Canadian goods highlight growing volatility in North American trade rules. Autos, steel, aluminum, dairy, energy and critical minerals are under discussion, with direct implications for regional manufacturing chains.

Trade Policy Driving Geopolitical Leverage

U.S. tariff policy is increasingly being used as a geopolitical instrument, including proposed 100% tariffs on major buyers of Russian oil and sectoral drug tariffs. Businesses should expect trade, sanctions, and industrial policy to become more intertwined in market-access decisions.

US-China trade retaliation escalates

Fresh tit-for-tat measures are widening operational risk: Washington blacklisted more than 40 Chinese firms and restricted robots, inverters and shipping operators, while Beijing sanctioned seven US entities and tightened drone exports, complicating market access, compliance and cross-border planning.

Fed communication uncertainty rising

Federal Reserve Chair Kevin Warsh is considering reducing annual policy meetings from eight to five or six while maintaining limited forward guidance. Fewer decision points and less signaling could increase market volatility, complicating hedging, borrowing, and long-duration investment planning for businesses.

Defense supply chains face curbs

China added 13 European entities to its dual-use export restriction list, including three French companies, requiring approvals for rare-earth related sales. The move heightens procurement uncertainty for French defense and advanced-technology manufacturers dependent on specialized Chinese materials and components.

Macroeconomic resilience supports investment

Recent official data show first-half 2026 growth of 5.45%, investment realization above Rp1,010 trillion, controlled inflation and reaffirmed investment-grade ratings. This supports Indonesia’s attractiveness for foreign investors, although businesses should still monitor fiscal execution, exchange-rate pressures and external demand conditions.

Oil pipeline continuity secured

Turkey and Iraq signed a one-year accord preserving the Iraq-Turkey pipeline and guaranteeing 750,000 barrels per day via Ceyhan while negotiating a broader framework. The deal lowers near-term export disruption risk and reinforces Turkey’s role in regional energy transit.

Iran Conflict Hits Coastal Trade

US-Iran conflict has disrupted Pakistan’s tuna trade and boatbuilding sector, halting access to Iranian ports, hurting thousands of fishermen and cutting new vessel orders by up to 90%, with spillovers for coastal livelihoods, informal cross-border commerce and maritime supply chains.

Oil market shock resilience

Aramco says the Iran conflict removed 2.6 billion barrels from global supply, while Saudi operations maintained 98.4% reliability and posted $32.69 billion quarterly profit, showing both extreme market disruption and Saudi Arabia’s continuing role as a critical stabilizing supplier.

Investor confidence in energy

Officials say Egypt has cleared arrears owed to oil and gas partners, improving confidence in the sector’s payment environment. Combined with new exploration and infrastructure linkages, this may support upstream investment decisions, though security and geopolitical exposure remain elevated.

Critical Dependency Mapping Expands

Berlin is informally mapping China’s dependence on German and European technologies, especially semiconductor equipment, specialist components and servicing capabilities. The work signals heightened contingency planning, tougher scrutiny of cross-border supply links and greater geopolitical sensitivity around high-tech industrial partnerships.

Stricter origin rules pressure manufacturing

Automotive rules of origin remain the main sticking point, with Washington seeking higher regional or US content to curb Chinese transshipment through Mexico. Companies may face rising compliance costs, supplier restructuring, and pressure to localize more inputs across North America.