Middle East shock lifts costs

Conflict-linked disruption around Hormuz is feeding higher oil, LNG and electricity costs in Japan, deepening imported inflation and operational risk. One report says around 90% of Japan’s crude and 11% of LNG normally transit Hormuz, exposing energy-intensive sectors and logistics chains.

EAEU trade diversification push

Thailand’s push to accelerate a free trade agreement with the Eurasian Economic Union signals a search for alternative export markets amid US trade friction, though firms should weigh sanctions exposure, payment frictions, and elevated Russia-related geopolitical and compliance risks.

US Tariff Exemption Pressure

Canberra is seeking relief from new US tariffs of 12.5% on Australian goods tied to forced-labour compliance concerns, despite the bilateral free trade agreement. The dispute raises landed-cost, compliance and market-access risks for exporters and supply chains.

US-Canada Tariff Escalation

Washington imposed 50% tariffs on about $20 billion of Canadian goods using Section 338, triggering Canadian retaliation. The dispute threatens integrated autos, metals and consumer goods flows, raising North American costs and undermining planning certainty for cross-border investors and suppliers.

Refinery strikes upend fuel flows

Ukrainian attacks cut Russian crude processing to about 3.6 million barrels per day in July, roughly one-third below seasonal norms, forcing export bans, rationing and emergency imports. Energy, transport, farming and industrial operations face rising supply volatility and delivery risk.

Automotive sector shifts to drones

France is linking automotive manufacturers with defense drone producers to build mass-production capacity, with projects targeting 100 drones daily by November 2026 and up to 1,000 monthly by 2027. The crossover may reshape supplier networks, electronics demand and industrial allocation.

US alliance trade frictions

Washington-Seoul ties are increasingly shaped by tariffs, market access disputes, Coupang-related regulatory tensions, and scrutiny of South Korea’s planned $350 billion US investment package, creating uncertainty for exporters, investors, and firms dependent on stable bilateral commercial rules and implementation timelines.

Black Sea export disruption

Russian attacks on ports and commercial shipping have effectively halted Ukraine’s Black Sea corridor during harvest season, slashing August grain exports 76% year on year, diverting carriers to Constanta, and sharply raising freight, insurance, and operational uncertainty for exporters and importers.

Steel Aluminum Lumber Exposure

Canada is seeking relief from existing Section 232 tariffs on steel, aluminum, lumber, and autos, while possible quota arrangements remain under discussion. Continued restrictions threaten export volumes, margins, and manufacturing competitiveness across North American industrial supply chains.

Gas storage vulnerability grows

Germany’s gas storage was reported at just 47% of capacity in August, the lowest on record, despite holding over 20% of EU storage capacity. Berlin’s reluctance to mandate emergency purchases increases winter supply, price and cross-border spillover risks for energy-intensive manufacturers and logistics networks.

Oil exports and China exposure

Iran’s oil trade remains heavily dependent on China, which bought more than 80% of shipped crude in 2025, though volumes have fallen sharply. Any tighter enforcement on Chinese refiners, banks or intermediaries could further disrupt energy markets and related financing networks.

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.

Tariffs Raising Domestic Costs

Recent reporting indicates American businesses and consumers bear roughly 90% of tariff costs, while prior Section 122 duties required $166 billion in repayments. Higher import costs are pressuring margins, household demand, procurement strategies, and competitiveness of U.S.-based manufacturing.

Critical minerals beneficiation drive

Government and SADC leaders are pressing to stop exporting raw minerals and build regional value chains in platinum-group metals, manganese, lithium, cobalt and graphite. This raises opportunities in processing, battery inputs and manufacturing, while increasing policy focus on local value-add requirements.

ASEAN engagement supports diversification

The UK is doubling down on ASEAN ties, adopting a new five-year action plan through 2031 and emphasizing trade, maritime security and economic resilience. For international firms, this reinforces UK support for Indo-Pacific diversification, alternative sourcing and broader post-Brexit trade network development.

Tariff escalation threat persists

US tariff pressure remains a central commercial risk, with reports of threatened rates rising from 15% to 25% and possible additional action under Section 301-style excess-capacity measures. Exporters in autos, steel and industrial goods face pricing and market-access uncertainty.

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.

Suez and SUMED rerouting boom

As Gulf exporters bypass threatened sea lanes, Egypt’s SUMED pipeline and Mediterranean terminals are becoming critical alternatives. Kpler data showed Sidi Kerir crude loadings rising above 2.1-2.3 million barrels per day, reshaping regional energy logistics and creating infrastructure bottlenecks.

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.

Concessions on Dairy Autos

Canada is considering concessions on dairy quota administration, retaliatory auto tariffs, alcohol sales and procurement policies to secure tariff relief. These possible trade-offs could reshape competitive conditions for agrifood, automotive, retail distribution and public contracting across the Canadian market.

Critical Minerals Access Prioritized

US negotiators are seeking preferential access to Canadian lithium, nickel, cobalt and copper to reduce dependence on Chinese supply chains. This reinforces policy support for regional sourcing, reshapes mining and battery investment strategies, and may redirect procurement toward politically preferred suppliers.

Dairy Market Access Tensions

U.S. demands for wider dairy access and changes to tariff-rate quota allocation have become a major bargaining point. Because supply management is politically sensitive, especially in Quebec, concessions could reshape agri-food trade conditions while intensifying domestic political and regulatory uncertainty.

Hormuz closure cripples shipping

The Strait of Hormuz remains effectively closed, with daily vessel traffic falling from about 130 ships to barely a dozen. Missile strikes, routing disputes and delayed reopening are severely disrupting energy flows, maritime schedules, freight costs and regional supply-chain reliability.

Mayor escrutinio por transbordo chino

La Casa Blanca colocó a México entre los principales nodos de riesgo de transbordo ilegal de mercancías chinas, con estimaciones de 67,000 millones de dólares triangulados vía México, India y Vietnam en 2025. Esto anticipa más auditorías, verificaciones aduaneras y posibles sanciones comerciales.

Mining Sector Legislative Crackdown Proposed

The General Mining Laws Amendment Bill proposes criminalizing illicit mining with fines up to R100 million and prison sentences up to 30 years. The legislation targets the entire illegal mining value chain, addressing linked crimes including human trafficking and infrastructure damage, while strengthening trust regulations against money laundering.

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.

China demand and floating storage

Weak Chinese refinery demand is compounding Iran’s export bottlenecks. Shandong independent refiners were running at just over 48% capacity versus a near-60% seasonal average, while Iranian crude in floating storage rose 14% to 135 million barrels, distorting regional supply chains.

Trade deals need localisation

Post-CPTPP results with Malaysia show tariff-free access alone is not translating into export growth. UK exports to Malaysia fell 2.0% to £3.5 billion even as bilateral trade rose 5.0%, underscoring that market localisation and payments adaptation matter as much as tariffs.

Fiscal strain and rating risk

Concern is growing over Germany’s AAA rating as debt rises, growth stays weak and political uncertainty persists. Planned borrowing exceeds one trillion euros over five years; any downgrade would raise financing costs, tighten fiscal space and potentially dampen infrastructure, corporate and investment spending.

Forced-labor compliance tightening

Thai officials highlighted stricter rules against forced labor in export supply chains and plans to accelerate legislation banning imports made with forced labor, pointing to rising ESG, traceability, and audit requirements for exporters seeking to preserve access to sensitive Western markets.

Export market deterioration deepens

Germany’s first-half exports to China fell more than 12% to just under €37 billion, while exports to the United States dropped about 6% to over €74 billion. Weak external demand compounds domestic industrial weakness, reducing revenue visibility for exporters and exposing concentrated market dependence.

Trade talks drive policy concessions

To secure better US tariff terms, Bangkok has floated concessions including lower tariffs on American beef and lamb, possible alcohol tariff changes, and adoption of US standards, signaling potential regulatory shifts affecting import competition, sourcing, and domestic sector protections.

North Korea diplomacy reshapes risk

US efforts to reopen talks with Pyongyang are influencing alliance management and military posture, even as North Korea deepens ties with Russia and continues missile activity. Businesses should monitor shifts in deterrence, sanctions exposure and geopolitical volatility affecting Korean Peninsula operations.

SADC infrastructure integration push

As SADC chair, South Africa is prioritising energy, transport, ports, water, and digital infrastructure to lift intra-regional trade from 20% to 50%. If implementation advances, firms could benefit from improved corridors and logistics, though delivery risk remains material.

Rhine low-water logistics disruption

Historic low Rhine water levels are disrupting inland shipping for chemicals, metals and energy cargoes, forcing costly shifts to road, rail and smaller vessels. With Duisburg load factors reportedly near one-third normal, supply chains face higher freight costs, delivery delays and reduced operational resilience.

Renewable Energy Strategy Targeting 45% by 2028

Egypt's national strategy targets 45% renewable energy in the power mix by 2028, backed by 5 trillion EGP in sector investments since 2014. The EU pledged $794 million for grid modernization, while government initiatives support industrial solar transition and battery manufacturing localization.