Vision 2030 Drives Economic Diversification

Saudi Arabia’s Vision 2030 is accelerating economic diversification, reducing reliance on oil by expanding sectors like mining, tourism, logistics, and manufacturing. This transformation is reshaping the investment landscape and creating new opportunities for international businesses across multiple industries.

US-Canada Trade Tensions Escalate

President Trump’s threats of 100% tariffs on Canadian exports, triggered by Canada’s partial trade agreement with China, mark a dramatic shift in North American trade relations. These tensions inject volatility into cross-border supply chains, investment planning, and the upcoming CUSMA review.

Export-Led Growth Under Global Pressures

Vietnam’s export-driven economy faces mounting US tariffs (up to 20%) and EU trade measures, threatening key market access. The government is actively diversifying export destinations to mitigate risks, but global trade tensions remain a significant operational challenge.

Labor Market and Immigration Policy Uncertainty

US labor market tightness and evolving immigration policies continue to affect talent mobility and operational planning. Businesses face challenges in workforce recruitment, retention, and compliance, with implications for productivity and international assignments.

Fuel Regulation, Security, and Energy Transition

Brazil is intensifying fuel regulation, updating tariffs, and promoting biogas and sustainable aviation fuel. However, fuel theft in pipelines is rising, especially in São Paulo, posing operational and security risks. The energy transition agenda is advancing, but regulatory and enforcement challenges remain.

Regional Trade Expansion and Diversification

Turkey is rapidly expanding trade with Gulf countries and the UK, with bilateral trade with Kuwait up 52% and UK trade targeted at $40 billion. These efforts reduce dependency on traditional partners and open new investment and supply chain opportunities.

ESG and Sustainability Standards Tighten

Germany’s modular building sector is increasingly shaped by strict ESG and sustainability requirements, including CSRD implementation. Compliance with green building standards and lifecycle emissions reporting is now essential for market access, financing, and supply chain integration.

Critical Minerals and Mining Expansion

Saudi Arabia is investing $2.5 trillion in mineral reserves, including rare earths, gold, copper, and lithium, aiming to become a global mining and processing hub. Strategic partnerships with the US, Canada, Brazil, and others are reshaping global supply chains and reducing reliance on China for critical minerals.

Supply Chain Disruptions and Contingency Planning

UK firms face significant supply chain risks from tariff shocks and potential trade war escalation. Business groups urge contingency planning, as higher import costs, border delays, and regulatory divergence threaten profitability, especially for SMEs and multinationals with transatlantic operations.

Critical Minerals and Geopolitical Competition

Indonesia’s dominance in nickel and tin places it at the center of US-China rivalry for critical minerals. While new trade agreements promise investment, weak governance and inconsistent downstream policies risk Indonesia becoming a raw material supplier rather than a value-added manufacturing hub.

Energy Import Dependency and LNG Shift

Domestic gas production declines and regional supply disruptions forced Egypt to import a record 9 million metric tons of LNG in 2025. The country is transitioning from a gas exporter to a major importer, raising costs and energy security concerns.

Regulatory Reform and Ease of Doing Business

Recent legal and regulatory reforms, including the repeal of obsolete statutes and streamlined customs and tax processes, are improving India’s business climate. These measures enhance transparency, reduce compliance costs, and support foreign investor confidence in long-term operations.

Resilience and Diversification of Manufacturing

TSMC and other Taiwanese firms are accelerating overseas expansion, notably in the US, Germany, and Japan, to mitigate geopolitical and operational risks. While Taiwan remains the core hub, a gradual shift in advanced manufacturing capacity abroad is underway.

Political Gridlock on Defense and Security

Taiwan’s $40 billion defense budget faces parliamentary opposition, raising concerns about its deterrence capabilities amid rising Chinese military activity. Political divisions could impact defense procurement, foreign confidence, and overall security stability.

Resilient Political and Regulatory Environment

Vietnam’s political stability, reinforced by recent leadership consolidation, underpins its appeal as a business destination. Ongoing regulatory reforms focus on transparency, anti-corruption, and legal discipline, fostering greater predictability and confidence for international investors.

Deteriorating Investment Climate and Human Rights Concerns

Widespread repression, mass casualties, and international condemnation have further eroded Iran’s investment climate. Heightened scrutiny over human rights abuses and governance failures increases reputational and regulatory risks for foreign investors and partners.

Rising Franco-German Defense and Policy Tensions

France is increasingly uneasy about Germany’s €500 billion defense buildup and growing influence in European security and industrial policy. Disputes over joint defense projects and diverging strategic priorities could affect cross-border investments and the future of European industrial cooperation.

ESG Standards and Regulatory Pressure

Environmental and social governance (ESG) standards are increasingly shaping investment and operational decisions, especially in mining. While Indonesia is adopting international frameworks, enforcement remains uneven, and companies face rising pressure from global buyers and lenders to improve compliance and transparency.

London’s Fragile Business Confidence

London remains the UK’s economic engine, but business confidence is undermined by regulatory uncertainty, high costs, and policy instability. International trade, investment, and infrastructure projects continue, yet firms demand long-term policy clarity to support growth and global competitiveness.

Capital Controls Tighten Amid Fiscal Strain

New regulations require declarations for cash exports over $100,000 and restrict gold bar movements. These controls aim to curb capital flight, increase transparency, and stabilize the ruble, but may deter foreign investment and complicate international financial operations in Russia.

Sustainable Development And Regulatory Compliance

Vietnam’s wood and agricultural sectors are adapting to stringent international sustainability and legality standards, especially from the US and EU. Compliance with deforestation-free and traceability requirements is now essential for continued access to major export markets.

Privatization and Investment Facilitation Initiatives

The government’s focus on privatizing state assets and the creation of the Special Investment Facilitation Council have attracted over $2 billion in new FDI. However, bureaucratic inefficiencies and inconsistent implementation continue to challenge the business environment.

CUSMA’s Uncertain Future and Renegotiation

The Canada-US-Mexico Agreement faces an uncertain future, with President Trump calling it ‘irrelevant’ and considering separate bilateral deals. The upcoming review could disrupt established trade flows, regulatory certainty, and investment strategies for firms operating in North America.

Circular Economy Initiatives Gain Momentum

France is advancing circular economy models for EV batteries, with startups and industrial players piloting second-life and recycling projects. These initiatives are increasingly supported by public policy, enhancing resource efficiency and opening new business models for investors.

Macroeconomic Stabilization and Reform Momentum

Pakistan has achieved notable macroeconomic stabilization, with inflation dropping to 4.5–5.5%, policy rates declining to 10.5%, and foreign reserves rising to $16.1 billion. Structural reforms, fiscal discipline, and privatization are improving investor sentiment and positioning Pakistan as a more attractive investment destination.

Black Sea Grain Exports Remain Volatile

Ukraine’s grain exports through the Black Sea are subject to ongoing security threats and corridor disruptions. The uncertainty around export agreements and maritime safety continues to affect global food prices and the reliability of agricultural supply chains.

Regional Geopolitical Volatility

The Gaza war and broader regional tensions have directly affected Egypt’s economy, trade, and supply chains. Egypt’s diplomatic efforts for regional stability remain critical, but ongoing volatility poses persistent risks for international business operations.

Semiconductor and Technology Sector Push

Vietnam is prioritizing the development of its semiconductor and technology industries, including chip fabrication and critical minerals processing. Collaboration with the EU and other partners aims to move Vietnam up the value chain, supporting high-tech investment and innovation ecosystems.

EU Customs Union Modernization Stalemate

Turkey’s business community is pressing for the modernization of the EU-Turkey Customs Union, which is critical for trade and value chains. Delays and lack of progress risk Turkey’s competitiveness, especially as new EU FTAs and green regulations reshape market access and supply chains.

Western Sanctions Reshape Trade Flows

Sweeping US and EU sanctions have forced Russia to redirect over 80% of its trade and energy exports to 'friendly' nations, notably China and India. This realignment has disrupted global supply chains, increased market volatility, and complicated compliance for international businesses.

Energy Dependency and Strategic Vulnerability

Germany’s reliance on imported energy, particularly US LNG after the Russian phase-out, exposes its economy to price shocks and political leverage. This dependency increases operational risks for manufacturers and raises costs, impacting competitiveness and long-term investment planning.

Supply Chains Strained by Workforce Loss

Widespread displacement, conscription, and casualties have reduced Ukraine’s workforce and damaged logistics infrastructure. These factors contribute to ongoing supply chain disruptions, limiting service coverage and production capacity, with a challenging outlook for 2026.

Renewable Energy Transition Accelerates

Major projects like the 2 GW Tathra wind, solar, and battery development highlight Australia’s rapid shift from coal to renewables. Fast-tracked approvals and grid investments are transforming the energy landscape, creating opportunities in clean technology but also raising questions about grid reliability and transition costs.

US Trade Scrutiny and Visa Restrictions

The US has suspended immigrant visa processing for Thai nationals and imposed stricter origin verification on Thai exports. These measures heighten compliance risks, potentially disrupt trade flows, and complicate market access for Thai businesses in the US.

Labor Market Tightness and Transformation

The US labor market remains tight, with low unemployment and rising wages, while technological adoption and immigration policy shifts are transforming workforce dynamics. These trends impact talent acquisition, operational costs, and long-term competitiveness for both domestic and international firms.

Technology Export Controls and Geopolitical Rivalry

US technology export controls, especially targeting China, continue to escalate. This restricts access to advanced semiconductors and dual-use technologies, prompting retaliatory measures and complicating cross-border R&D, investment, and supply chain strategies for global tech firms.