Heightened Geopolitical and Maritime Risks

US-led enforcement actions, such as the seizure of Russian tankers, and retaliatory Russian responses are escalating maritime security risks. These developments threaten shipping insurance, increase costs, and expose supply chains to new vulnerabilities.

Infrastructure and Housing Investment Surge

The federal government is investing billions in housing, transit, and green infrastructure, particularly in Quebec and major urban centers. These investments aim to address supply shortages, stimulate economic growth, and enhance Canada’s competitiveness as a destination for international capital.

Macroeconomic Reform and Privatization Drive

Egypt is accelerating economic reforms, including privatization and reducing state economic involvement, to attract foreign investment. The government aims for over 70% private sector investment by 2030, supported by IMF-backed policies, improved credit ratings, and targeted sector incentives.

Automotive Sector Faces Major Headwinds

The German automotive industry, highly reliant on US exports and global supply chains, is acutely exposed to new tariffs and trade uncertainty. Stock declines of 3-5% for major automakers reflect investor anxiety, while potential cost increases, investment delays, and supply chain disruptions threaten profitability and employment.

Erosion of US Economic Safe-Haven Status

Erratic trade and monetary policies have triggered market volatility, with global investors questioning the reliability of US assets. A ‘Sell America’ trend could weaken the dollar, raise borrowing costs, and undermine the US’s traditional role as a global financial anchor.

UK-EU Relations and Strategic Realignment

Brexit’s legacy continues to shape UK-EU cooperation. Recent US protectionism and security concerns are prompting renewed dialogue and potential closer alignment, as both sides seek stability and leverage in an increasingly fragmented global trading system.

Regulatory and Tariff Uncertainty

US tariff policy remains unpredictable, with threats of 100% tariffs if production is not relocated. While Taiwan secured favorable terms for now, ongoing trade negotiations and political shifts in the US could alter the business environment for Taiwanese exports.

Renewable Energy and Green Transition

Saudi Arabia is accelerating renewable energy deployment, with solar and wind capacity in the MENA region projected to rise tenfold by 2040. Major joint ventures and new energy facilities, like CATL’s Riyadh center, support the Kingdom’s decarbonization and industrial diversification, creating new investment and supply chain opportunities.

Infrastructure Investment and AI Integration

Massive US infrastructure investment is underway, increasingly integrating AI for project management and sustainability. However, regulatory shifts and fragmented standards pose execution risks, while competition over infrastructure data and standards shapes global influence and market access.

US-China Trade Truce and Tariffs

The recent US-China trade truce has led to reduced tariffs and eased tensions, supporting a 2.4% US growth forecast for 2026. This stabilization benefits global supply chains and trade flows, yet ongoing rivalry and policy unpredictability remain significant risks for international businesses.

Energy Transition and LNG Import Surge

Egypt’s domestic gas production decline has led to record LNG imports—over 9 million metric tons in 2025—mainly from the US and Qatar. New energy deals and infrastructure are reshaping Egypt’s energy mix, with a strategic pivot toward renewables and regional energy hub ambitions.

Accelerated Economic Reform Agenda

Vietnam’s leadership has committed to sweeping economic and administrative reforms, targeting over 10% annual GDP growth through 2030. This includes bureaucratic streamlining, private sector empowerment, and innovation, with significant implications for investment climate and business operations.

Semiconductor Policy Reshapes Supply Chains

The US imposed a 25% tariff on advanced semiconductor exports to China, while striking a landmark $250 billion investment and tariff reduction deal with Taiwan. These moves aim to boost US chip manufacturing and supply chain security, but risk further decoupling and global supply chain realignment.

Export Diversification and Market Shift

China has offset declining US trade by expanding exports to Africa (up 26.5%), Southeast Asia (up 14%), and Latin America (up 8%). This diversification strategy reduces reliance on Western markets, strengthens ties with the Global South, and reshapes global trade flows.

China-Pakistan Economic Cooperation Expansion

The second phase of CPEC is broadening from infrastructure to agriculture, technology, and minerals. New agreements focus on joint ventures, technology transfer, and value chain development, positioning China as Pakistan’s key strategic and economic partner, but also raising dependency and sovereignty concerns.

Escalating Agricultural Protests and Policy Risk

Mass farmer protests in Paris highlight deep discontent with trade liberalization, regulatory burdens, and competitiveness concerns. These disruptions impact logistics, threaten political stability, and increase the risk of abrupt regulatory changes affecting agri-business, food imports, and rural supply chains.

Semiconductor Supply Chain Realignment

Taiwan’s $250 billion investment in US chip manufacturing and supply chain relocation aims to reduce reliance on Asian supply chains, boost US manufacturing, and address security vulnerabilities. This shift will significantly impact global supply chains and technology sector competitiveness.

Surge in Foreign Direct Investment

Turkey attracted $12.4 billion in FDI in the first 11 months of 2025, a 28% increase year-on-year. The EU remains the main source, with wholesale, ICT, and food manufacturing leading. Improved macroeconomic stability and policy consistency drive renewed investor confidence.

Geopolitical Competition With China

Escalating US-China tensions over technology, trade, and critical minerals disrupt global supply chains. China’s green industrial push and export controls on key materials challenge US dominance, forcing firms to reassess sourcing, market access, and risk exposure in Asia-Pacific.

Political Stability Amid Global Tensions

Brazil’s diversified international relations and diplomatic tradition help mitigate risks from external interference, notably from the US. Political stability and global leadership ambitions support a favorable environment for long-term investment and trade strategies.

Australia-China Trade Relationship Volatility

Despite new Chinese tariffs on beef and ongoing strategic tensions, China remains Australia’s largest trading partner. The relationship is resilient but unpredictable, with regulatory shifts and quotas impacting key exports, requiring businesses to diversify markets and manage risk exposure.

Federal Reserve Policy and Political Pressures

The Federal Reserve has paused rate cuts, holding at 3.5-3.75%, amid robust GDP growth and persistent inflation. Political interference, including Supreme Court cases and leadership uncertainty, threatens Fed independence, influencing monetary policy outlook and global investor confidence.

EU Considers Anti-Coercion Measures

In response to US tariffs, the EU is preparing to activate its anti-coercion instrument, potentially restricting US market access and imposing retaliatory tariffs. This unprecedented move could escalate into a full-scale trade war, amplifying risks for Finnish companies.

Infrastructure Investment and Public Finance

Vietnam is launching a new wave of infrastructure projects, targeting $5.5 billion in foreign loans for 2026 and up to $38 billion by 2030. While these investments aim to support growth and connectivity, persistent disbursement delays, land clearance issues, and public debt management remain key operational risks.

Tariff-Driven Supply Chain Reconfiguration

US tariffs have forced businesses to diversify supply chains, reduce inventory holdings, and reconfigure logistics networks. The shift from legacy mega-hubs to intermediate nodes and diversified ports is improving efficiency but increasing operational complexity and costs.

Foreign Direct Investment Decline

Foreign direct investment into China dropped 9.5% in 2025, reflecting investor caution amid regulatory scrutiny and geopolitical tensions. While some countries increased investments, the overall decline signals challenges for China’s business climate and global integration.

Critical Minerals Supply Chain Resilience

Japan is aggressively diversifying its critical minerals and rare earths supply, launching deep-sea mining projects and forging new partnerships with the EU, Italy, and India. These efforts aim to reduce dependency on China, which controls about 60-70% of global rare earth supply, safeguarding manufacturing and technology sectors.

Currency Volatility and Monetary Policy

The Brazilian real is forecast to remain around R$5.50 per USD in 2026, with inflation expectations at 4.05% and the Selic rate at 12.25%. External shocks, US interest rates, and election risks may drive volatility, affecting trade contracts, investment returns, and hedging strategies.

Foreign Competition and Trade Policy Risks

The rise of Chinese battery and EV manufacturers in Europe, combined with potential EU tariffs on imported batteries and hybrids, creates policy uncertainty. International businesses must monitor evolving trade barriers and adapt sourcing and investment strategies accordingly.

Defense Build-Up and Asymmetric Deterrence

Taiwan is investing $40 billion in drones, AI-based defense systems, and advanced weaponry to counter China’s military threat. This defense modernization, heavily reliant on US support, is integral to business risk assessments and supply chain continuity planning.

Pending Supreme Court Ruling on Tariff Authority

A forthcoming Supreme Court decision will determine the executive branch’s authority to impose sweeping tariffs. The outcome could reshape the US trade landscape, affecting the predictability of future trade policy and the legal environment for international business operations.

USMCA Uncertainty and Trade Tensions

The 2026 review of the USMCA (T-MEC) creates major uncertainty for Mexico’s trade and investment climate. US threats to let the agreement lapse or impose new tariffs could disrupt supply chains, especially in automotive and manufacturing, impacting billions in cross-border trade.

Tariff Preferences and Market Access

Taiwan secured preferential tariff treatment for semiconductors, auto parts, and more, aligning with Japan, Korea, and the EU. This levels the playing field for Taiwanese exports, enhances competitiveness, and provides clarity for long-term investment and supply chain planning.

Renewable Energy Expansion and Investment

Turkey achieved record wind energy growth in 2025, surpassing 14,700 MW installed capacity, and is preparing for its first offshore wind tenders. Predictable policy and financing conditions attract both domestic and foreign investors, positioning Turkey as a regional clean energy hub.

Snap Election and Policy Uncertainty

Prime Minister Takaichi’s snap election on February 8, 2026, introduces significant policy uncertainty. Key campaign issues include fiscal stimulus, tax cuts, and defense spending, with the election outcome set to shape Japan’s economic and regulatory environment for years, impacting investor confidence and market stability.

US-Led Board of Peace Reshapes Governance

The establishment of the US-chaired Board of Peace, with Israel as a member, is redefining post-war Gaza governance and reconstruction. The board’s broad mandate and financial requirements create new frameworks for international engagement, but also provoke political tensions and uncertainty for investors.