Regional conflict spillovers and trade flows

Gaza and border dynamics continue to influence tourism, shipping confidence, and government spending priorities. Even with periods of de-escalation, companies face episodic security alerts, insurance premiums, and compliance considerations for operations near sensitive border regions.

US tariffs reshape export outlook

US tariff policy has shifted to a temporary 10% global import surcharge (150 days from Feb 24, 2026), while sectoral tariffs persist (e.g., metals 50%). This creates near-term pricing relief but high uncertainty for exporters and supply contracts.

Rising labor costs and compliance

A new minimum-wage adjustment is being prepared for 2026, with regional classifications and mandatory social insurance and union-related contributions affecting total labor cost. Manufacturers should budget for wage drift, update payroll compliance, and reassess automation versus hiring plans.

Energy price pass-through inflation

Oil and LNG price spikes quickly feed Korea’s power and industrial costs; LNG is ~28% of electricity generation. Higher JKM and crude-indexed contracts can lift wholesale power prices and strain Kepco/Kogas finances, increasing probability of tariff hikes and cost-push inflation.

Tariff volatility and legal shifts

Supreme Court curtailed emergency-tariff authority, but the administration pivoted to temporary Section 122 surcharges and signals broader use of Sections 232/301. Rapid rate and exemption changes raise pricing, contracting, and inventory risks for importers and exporters.

Tightening investment and security screening

US scrutiny of foreign investment via CFIUS and related national-security reviews remains stringent, especially in sensitive tech, data, and critical infrastructure. Deal timelines may lengthen, mitigation requirements rise, and some transactions face prohibitions or forced divestment risk.

Halal rules uncertainty for imports

ART annexes propose halal certification/labeling exemptions for some US cosmetics, medical devices and selected goods, triggering domestic backlash from MUI/LPPOM and potential WTO non-discrimination challenges. Importers and FMCG/healthcare firms face shifting labeling, certification costs and reputational sensitivities.

Volatilidade macro e trajetória da Selic

Projeções de mercado indicam IPCA 2026 em 3,91% e Selic no fim de 2026 em 12,13%, com câmbio projetado a R$5,45. Juros ainda elevados encarecem capital e hedge, enquanto desaceleração/queda abre janelas para M&A e financiamento de cadeias produtivas.

Gas expansion reshapes energy mix

Aramco started Jafurah shale gas production (Dec 2025), targeting 2 bcfd gas, 420 mmcfd ethane and 630,000 bpd liquids by 2030. Replacing ~500,000 bpd crude burn boosts exports, petrochemicals feedstock, power reliability, and investor opportunities.

Pakistan–Afghanistan border trade disruptions

Prolonged closures of key commercial crossings since mid-October have stranded hundreds of trucks and halted cement, food and medicines flows. Persistent security frictions raise transit-time uncertainty for regional corridors, increase inventory buffers, and redirect trade via Iran/China routes.

Monetary easing, baht volatility

The Bank of Thailand cut rates to 1.0% amid weak growth and 11 months of negative headline inflation. A strong, volatile baht—partly gold-linked—tightens exporters’ margins, complicates pricing, and increases hedging costs for importers and supply-chain contracts.

Defense export expansion and backlash

Korean defense exports are scaling in Europe and the Middle East, with major deals and R&D MOUs, supporting industrial growth. But potential NATO-linked support for Ukraine risks Russian retaliation, adding sanctions, cyber, and commercial exposure for Korea-linked operations.

Regulatory capacity, corruption and compliance

Investor confidence depends on effective regulators, enforcement against organised crime, and transparent procurement. Progress such as FATF greylist removal supports financial flows, but municipal arrears, illicit connections, and governance weaknesses continue to elevate operational risk and compliance overhead.

Major rail logistics capacity build

Turkey secured preliminary $6.75bn financing from six international institutions for a 125–126km Northern Railway Crossing linking Istanbul’s airports and boosting Asia–Europe freight. Target capacity is ~30 million tons annually, improving reliability and lowering transit risk for supply chains.

Sanctions Enforcement and Dual-Use Leakage

Sanctions compliance risk is rising as Ukraine alleges Russian drones source German Infineon transistors via third countries; 137 German components were identified in Russian weapons. Companies face heightened export-control scrutiny, end-use due diligence, and potential penalties for indirect re-exports.

US-China tech controls escalation

Tightening US export controls on advanced AI chips and China’s push for tech self-reliance deepen compliance burdens, licensing uncertainty and dual-use scrutiny. Multinationals face restricted market access, higher due-diligence costs, and accelerated need to redesign products and supply chains around bifurcated tech stacks.

Regional proxy conflict hits shipping

Iran-aligned militias and proxy dynamics around the Red Sea and Gulf raise marine risk and insurance premiums, incentivizing rerouting and longer lead times. Businesses reliant on Suez/Bab el‑Mandeb lanes should plan for persistent volatility, capacity tightness, and higher landed costs.

Strategic shipping consolidation uncertainty

The proposed $4.2bn Hapag-Lloyd acquisition of Israel’s Zim faces government ‘golden share’ scrutiny, labor action, and security objections. Outcomes affect Israel’s guaranteed wartime import capacity, carrier options, freight pricing, and resilience planning for import-dependent industries.

Domestic energy rationing threat

To protect domestic supply, Egypt paused LNG exports via Idku (≈350 mmcfd) and curtailed regional pipeline exports, prioritizing electricity generation. Any return of load shedding would disrupt manufacturing output, cold chains, and logistics, while higher fuel-oil substitution raises emissions and costs.

External Buffers, Rupee Hedging Pressure

Forex reserves hit a record about $723.8bn, with gold around $137.7bn, giving RBI scope to smooth volatility via swaps and spot intervention. Yet tariff shocks and import costs can drive INR swings, increasing hedging, pricing and working-capital needs for multinationals.

Incertidumbre por revisión del T-MEC

La revisión obligatoria del T‑MEC antes del 1 de julio y señales en Washington de renegociación o incluso salida elevan el riesgo arancelario y de reglas de origen. Esto afecta decisiones de localización, contratos de largo plazo y valuación de proyectos exportadores.

Financial-Sector Opening, Bank FDI

Government discussions may lift FDI cap in state-owned banks from 20% to 49% while retaining 51% public ownership. If adopted, it would widen strategic-entry options for global banks and PE, support capital raising, and reshape competition in India’s credit and payments markets.

Foreign procurement access loosening

Saudi Arabia reversed parts of the regional-headquarters procurement restriction, enabling foreign firms to win government contracts via controlled exemptions on Etimad. This improves near-term market access for specialized suppliers, but bid-acceptance conditions and compliance documentation remain stringent.

Anti-smuggling and steel enforcement

Authorities are canceling and suspending hundreds of firms tied to irregular steel import/maquila programs under “Operación Limpieza,” alongside broader anti-contraband actions. Greater scrutiny of origin and valuation can disrupt supply for metals users and heighten due-diligence requirements for importers.

Russia trade rerouting and border friction

Trade increasingly reroutes via China, the Far East, Belarus and Central Asia as checks tighten. Border-crossing times for China–Kazakhstan–Russia routes have tripled at times, with delays up to a month and transport costs up 5–10%, straining inventory planning and service levels.

Energy grid attacks and rationing

Repeated strikes on generation and transmission continue to drive blackouts and reliance on electricity imports. Manufacturing, cold chains, and data centers must invest in backup power, redundant connectivity, and flexible scheduling; energy-intensive projects face higher operating costs and execution risk.

Competition policy and deal scrutiny

The CMA warned the Getty–Shutterstock merger could reduce competition in UK editorial imagery, with the combined firm supplying close to/above half the market. The stance signals active UK merger control, shaping deal timelines, remedies, and regulatory risk for acquisitions across sectors.

Sanctions compliance and Russia leakage

Reports show sanctioned-brand vehicles (including Japanese marques) reaching Russia via China through “zero-mileage used” reclassification, complicating export-control compliance. Multinationals should tighten distributor controls, end-use checks, and auditing to reduce enforcement, reputational, and penalties risk.

Energy infrastructure attacks, power rationing

Repeated strikes on generation and grid assets force firms onto costly imports and backup power, reducing industrial output and raising operating expenses. Growth is sensitive to localized outages; corporates should plan for intermittent electricity, heating and water disruptions.

Semiconductor-led export concentration

Exports surged 33.9% year-on-year in January, with semiconductor shipments up 103%, sustaining a 12-month surplus streak ($8.74bn in January). Heavy reliance on chips heightens exposure to AI-cycle volatility, export controls, and any U.S. or China tech trade tightening.

Forestry downturn and lumber dispute

Forestry remains under severe pressure from high US softwood duties, cited around 45% in some cases, alongside domestic harvest constraints. Expect mill rationalization, higher input volatility for construction products, and increased dispute-settlement risk as the US pushes to weaken binational panels.

Ports, logistics, and labor dynamics

U.S. port labor negotiations and automation disputes remain a recurring disruption risk for Atlantic/Gulf gateways, even when contracts are reached. Shippers should plan for volatility via routing diversity, buffer inventory, and carrier/terminal optionality to protect service levels and working capital.

Migration and skilled labor constraints

Tighter immigration policies and volatile H‑1B outcomes can constrain access to specialized talent, affecting tech, healthcare and advanced manufacturing operations. For investors, labor availability becomes a key site-selection variable, influencing reshoring economics and expansion timelines.

Energy transition: nuclear plus renewables

Seoul plans two new nuclear reactors by 2038 alongside renewables to cut coal/LNG reliance, responding to strong public support. This reshapes power-price trajectories and grid investment needs, influencing energy-intensive manufacturing costs and long-term decarbonization compliance.

Data reform and AI governance divergence

UK data-use and access reforms and evolving AI governance may diverge further from the EU AI Act and GDPR interpretations. Multinationals should anticipate changing rules on lawful processing, automated decisioning, and cross-border data transfers, raising compliance and product localisation costs.

Semiconductor geopolitics and routing

Semiconductors sit at the center of US investigations and potential Section 232 measures, yet direct US-bound Korean chip exports are relatively small and often routed via Taiwan packaging. Still, sudden chip tariffs or controls would disrupt AI supply chains and investment decisions.