Resilience and Reshoring in Supply Chains

Businesses are accelerating efforts to build resilient, diversified supply chains in response to policy volatility, tariffs, and geopolitical shocks. Nearshoring, friend-shoring, and investment in domestic capacity are key trends shaping future international business operations.

Semiconductor reshoring and export controls

Taiwan’s chip sector faces simultaneous pressures: US tariffs on certain advanced chips, tighter tech controls toward China, and major offshore fab investment. Firms must redesign compliance, IP protection, and capacity allocation while managing customer qualification and margin impacts.

Technology Export Controls and Decoupling

The US maintains and expands technology export controls, particularly targeting China and sensitive sectors like semiconductors and AI. These measures drive supply chain decoupling, compliance complexity, and strategic realignment for technology firms and global investors.

Nuclear Negotiations Shape Risk Outlook

Ongoing nuclear talks with the US and regional actors in Istanbul and Oman are pivotal. Outcomes will determine the future of sanctions relief, market access, and regional stability, but the risk of breakdown or military escalation remains high, directly impacting investment strategies.

E-Commerce and Logistics Transformation

South Korea’s logistics and third-party logistics (3PL) markets are expanding rapidly, fueled by e-commerce growth, technology adoption, and sustainability efforts. The market is projected to reach $41.7 billion by 2033, with trends toward omnichannel logistics, customized solutions, and green practices shaping operational strategies.

Power stability, grid bottlenecks

Eskom reports 200+ days without load-shedding and higher availability, boosting operational continuity. However, slow transmission expansion and contested unbundling constrain new generation connections, risking future curtailment for energy-intensive firms and delaying renewable-led decarbonisation plans.

Geoeconomic Rivalry and Supply Chain Realignment

US-China strategic competition over technology, critical minerals, and industrial policy is driving global supply chain realignment. Companies are diversifying sourcing, investing in resilience, and reassessing exposure to geopolitical risks, with implications for cost structures and market access.

Supply Chain Diversification and Resilience

US and Taiwanese efforts to co-locate semiconductor production and critical supply chains in the US and third countries aim to reduce reliance on China, enhance resilience, and manage geopolitical risk. This trend is shaping investment and operational strategies.

US-India trade deal recalibration

A framework for a reciprocal interim US–India agreement signals selective tariff relief tied to market-access concessions and rules-of-origin tightening. Companies should expect changing duty rates across textiles, chemicals, machinery and pharma inputs, plus increased focus on standards, NTBs, and supply-chain resilience clauses.

Regulatory Uncertainty and Standards Divergence

Diverging regulatory regimes between the UK, EU, US, and China complicate compliance for international businesses. Ongoing disputes over digital services, food standards, and AI governance increase operational complexity and may fragment market access for UK-based firms.

Supply Chain Disruptions and Humanitarian Restrictions

Israeli restrictions on aid organizations and border crossings, especially at Rafah, have disrupted humanitarian flows and supply chains. New registration requirements and ongoing security measures complicate logistics for international businesses and NGOs, raising operational and reputational risks.

UK as a Stable Investment Destination

UK leaders are leveraging global volatility to position the country as a haven for investment, emphasizing regulatory stability, financial sector strength, and innovation in AI and tech. This narrative aims to attract capital and talent, but is tested by ongoing geopolitical shocks.

US-Israel Strategic Partnership and Aid

The US continues to provide substantial military and economic aid to Israel, reinforcing bilateral ties and defense cooperation. This partnership underpins Israel’s security posture but also shapes the regulatory and sanctions environment, influencing international investment and technology transfer.

Geopolitical Tensions and Security Risks

Ongoing cross-strait tensions with China, including military posturing and economic coercion, create persistent risks for business continuity, supply chain stability, and foreign investment in Taiwan. The region remains a flashpoint with global ramifications for trade and security.

Supply chain resilience and logistics

Tariff-driven front-loading, shifting sourcing geographies, and periodic transport disruptions are increasing inventory costs and lead-time variability. Firms are redesigning networks—splitting production, adding redundancy, and diversifying ports and carriers—raising working capital needs but reducing single-point failure exposure.

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 tariff volatility, autos exposure

Washington’s surprise move to lift “reciprocal” tariffs to 25% (from 15%) on Korean autos, lumber and pharma heightens policy risk. Autos are ~27% of Korea’s US exports; firms may accelerate US localization, reroute supply chains, or hedge pricing.

USMCA Review and North America

The mandated USMCA joint review is approaching, with U.S. officials signaling tougher rules of origin, critical-minerals cooperation, and potential bilateralization. Any tightening could reshape automotive and industrial supply chains, compliance costs, and investment decisions across Mexico, Canada, and the U.S.

Industrial Competitiveness Risks

Brazil’s industrial sector faces higher production costs than Europe, risking deindustrialization as tariff barriers fall under new trade agreements. Without robust industrial policies, Brazil may see increased imports and reduced local investment in high-value sectors.

Climate shocks and heat stress

Flood reconstruction and increasingly severe heat waves reduce labour productivity, strain power systems and threaten agriculture-linked exports. Businesses face higher continuity costs, insurance constraints and site-selection trade-offs, with growing expectations for climate adaptation planning and resilient supply chains.

Agricultural and Resource Export Diversification

Australia continues to diversify export markets and products, leveraging new trade agreements and investments in minerals, agriculture, and technology. However, exposure to external shocks—such as Chinese trade actions or global commodity price swings—remains a significant risk for international investors and supply chains.

Regulatory Changes and Labor Compliance

Recent labor reforms include a 13% minimum wage hike, stricter workplace inspections, and new rules for app-based workers. Businesses must adapt to evolving compliance requirements, increased enforcement, and potential cost pressures in sectors like automotive and technology.

Kritische Infrastruktur und Sicherheitspflichten

Das Kritis-Dachgesetz verschärft Vorgaben für Betreiber kritischer Infrastruktur (Energie, Wasser u.a.): Risikoanalysen, Meldepflichten für Sicherheitsvorfälle, höhere Schutzmaßnahmen und Bußgelder. Das erhöht Capex/Opex, IT- und Physical-Security-Anforderungen sowie Anforderungen an Zulieferer und Dienstleister.

Fiscal Stabilization and Policy Reform

South Africa is nearing a fiscal turning point, with debt-to-GDP stabilizing and primary surpluses returning. Improved fiscal credibility has strengthened the rand and bonds, but sustaining reforms and managing coalition politics remain critical for long-term investor confidence.

Privatization and Foreign Investment Drive

Egypt is accelerating privatization and asset sales, offering incentives and infrastructure upgrades to attract foreign investors. Recent FDI inflows rose by 20-25%, supported by IMF agreements and credit rating upgrades. The government aims to reduce state participation and position Egypt as a regional trade and investment hub.

Energy Sector Expansion and Transition

Recent agreements with China and Gulf states are boosting Canadian oil, LNG, and uranium exports, while also fostering collaboration in renewables and clean technology. These developments are pivotal for Canada’s energy sector, supporting both traditional exports and the transition to net-zero goals.

Automotive profitability under tariffs

Toyota flagged that U.S. tariffs reduced operating profit by about ¥1.45tn and reported a sharp quarterly profit drop, alongside a CEO transition toward stronger financial discipline. For manufacturers and suppliers, this implies continued cost-down pressure, reallocation of investment, and trade-policy sensitivity.

Climate hazards raising operating costs

Wildfires, flooding and extreme weather are driving higher insurance premiums, physical supply disruptions and workforce impacts across Canada. Asset-heavy sectors should reassess site selection, business continuity planning, and climate-resilience capex, including backup power and logistics redundancy.

Labor Market Reform and Demographic Challenges

Japan is revising pension rules in 2026 to encourage seniors to remain in the workforce, addressing acute labor shortages and an aging population. While male parental leave uptake is rising, progress on gender diversity in management remains slow, affecting long-term productivity and talent strategies.

Energy export policy and pricing

US LNG export capacity and permitting decisions influence global gas prices and industrial competitiveness. Any tightening of export approvals or infrastructure constraints can raise volatility for energy-intensive manufacturers abroad, while expanded capacity strengthens US leverage and attracts downstream investment into North America.

Escalating US-UK Trade Tensions

President Trump’s imposition of 10–25% tariffs on UK exports in response to the Greenland dispute has triggered a transatlantic trade crisis. The UK faces heightened supply chain costs, investment uncertainty, and potential recession risks, with the EU preparing significant retaliatory measures.

Critical Minerals Investment Surge

Brazil is attracting substantial foreign investment in critical minerals, including rare earths, graphite, and nickel. Strategic partnerships with the US and EU are developing, positioning Brazil as a key supplier for clean energy and technology supply chains, and diversifying away from China.

Strategic ports and infrastructure sovereignty

Moves to return the Port of Darwin to Australian control highlight rising “sovereignty screening” over logistics assets. Investors in ports, airports, energy and telecoms should expect tougher national-interest tests, deal delays, and possible renegotiation or compensation disputes impacting valuations.

Energy Sector Transformation and LNG Imports

Egypt’s declining domestic gas production and unreliable regional supply have shifted it from a gas exporter to a major LNG importer. Record LNG imports, mainly from the U.S., expose Egypt to price volatility and supply risks, while new infrastructure and supply deals seek to stabilize industrial energy needs.

US Tariffs and Trade Policy Uncertainty

Despite 20% US tariffs on Vietnamese exports, trade volumes to the US have reached record highs. However, ongoing tariff threats and negotiations inject volatility into Vietnam’s export-led growth model, compelling businesses to diversify markets and adapt to shifting global trade policies.

Energy Cooperation and Gas Exports Advance

Israel is deepening energy partnerships, notably with Cyprus, to jointly develop offshore gas fields. These projects are central to regional energy strategies and offer significant opportunities for international investment, but remain sensitive to geopolitical shifts and security risks.