Aviation Expansion Supports Market Access

The launch of Riyadh Air, backed by the Public Investment Fund, adds momentum to Saudi Arabia’s aviation and tourism build-out. With plans to serve 100-plus cities, create 200,000 jobs, and expand airport capacity, connectivity for trade and investment should improve.

USMCA Review and Tariff Uncertainty

Canada faces its most significant external business risk from the July 1 USMCA review, with U.S. officials insisting tariffs on autos, steel and aluminum will remain. With nearly 70% of Canadian exports going to the U.S., policy uncertainty is constraining trade, investment planning and supply-chain decisions.

Logistics Hub Ambitions Accelerate

Saudi Arabia is reinforcing its role as a regional transit and re-export hub through ports, rail, and Red Sea trade corridors. Strong logistics performance and shipment rerouting capacity are supporting multinational manufacturers and distributors reassessing Gulf supply-chain footprints after maritime disruptions.

US Trade Frictions Persist

Washington plans to approve 18 Indonesian tariff-exclusion requests, yet an additional 10% tariff remains under Section 301. Unresolved disputes over Indonesia’s import licensing and U.S. metal tariffs sustain uncertainty for exporters, agribusiness, and firms dependent on stable bilateral market access.

Logistics corridors gain relevance

Mexico is advancing strategic freight infrastructure, notably the Interoceanic Corridor linking Salina Cruz and Coatzacoalcos, alongside port and rail upgrades. If execution improves, this could diversify trade routes, ease logistics bottlenecks, and support new industrial clusters in southern Mexico.

Labor Mobilization And Capacity Strain

Manpower shortages are intensifying as Kyiv raises military pay by one-third to 30,000 hryvnias and expands recruitment. For employers, mobilization pressures constrain labor availability, wage costs, project execution, and operational planning across manufacturing, construction, logistics, and business services.

Energy Infrastructure Under Attack

Ukrainian strikes are hitting refineries, pumping stations, storage depots and export terminals, including facilities linked to Novorossiysk and Taman. Russia’s crude output fell to 9.009 million barrels per day in May, increasing disruption risk for fuel availability, exports and logistics planning.

US Tariff and Trade Friction

Washington has proposed additional 12.5% tariffs on Japanese goods under a forced-labor trade probe, although Tokyo says bilateral terms should hold. The episode highlights persistent US policy unpredictability, affecting export planning, pricing, and localization decisions for Japan-based manufacturers.

State Ownership and Privatization

The government is advancing a 2026-2030 state ownership policy, wider private-sector participation, and asset recycling deals including major energy projects. This creates openings for foreign investors, but execution quality, valuation transparency, and policy consistency will determine commercial credibility.

Gas Reservation Disrupts LNG

Canberra’s proposed gas-reservation scheme could divert up to 20% of LNG export volumes to domestic users from 2027, unsettling Japanese, Korean and Malaysian investors and raising contract, pricing and sovereign-reliability concerns for energy-intensive trade, manufacturing and project finance.

Nuclear Cooperation and Shipbuilding

Seoul and Washington have opened accelerated talks on uranium enrichment, spent-fuel reprocessing, nuclear-powered submarines, and shipbuilding cooperation. The negotiations could reshape energy security, naval-industrial capacity, and high-value manufacturing, but also hinge on nonproliferation constraints and bilateral political trust.

Oil Sanctions Relief Uncertainty

Washington is reportedly preparing temporary waivers for Iranian oil sales, banking, transport, and insurance during a 60-day negotiation period. That could quickly alter supply balances, pricing, and legal exposure, but abrupt policy reversal remains a major risk for traders and investors.

Energy Costs and Fuel Shock

Petrol reached a record R28.06 per litre as global oil disruption and phased-out fuel-levy relief lifted transport and input costs. Higher energy expenses are feeding inflation, squeezing consumer demand, and raising operating costs across manufacturing, retail, agriculture, and logistics.

External Sector Fragile Stability

Pakistan’s external position improved with remittances up 8.2% and a $72 million current account surplus through March, but April swung to a $324 million deficit. Exchange-rate stability remains vulnerable to energy costs, trade disruption, and external financing conditions.

Industrial Power and Input Shortages

Damage to industrial sites and disrupted imports are constraining manufacturing supply chains, especially steel, petrochemicals, electronics and food inputs. Factory closures and component scarcity are raising costs for domestic production and limiting reliability for foreign partners sourcing goods or materials.

Energy Diversification and Sanctions Risk

India has diversified crude sourcing across roughly 40 countries, but possible US moves to end waivers on Russian oil purchases could reshape procurement economics. Energy-intensive sectors should plan for supply shifts, compliance reviews and renewed volatility in fuel costs.

Nuclear Talks and Policy Uncertainty

Ceasefire and nuclear negotiations remain fluid, with Washington linking any sanctions relief to major Iranian nuclear concessions. This creates a binary operating environment for investors: either partial reopening or deeper isolation, making market-entry, contracting and capital-allocation decisions exceptionally difficult.

Energy And Oil Shock Exposure

Middle East tensions have pushed oil higher, feeding transport, petrochemical, fertilizer, and food costs across Brazil’s economy. Although Brazil is relatively insulated as an exporter with strong renewables, imported-input sectors still face margin pressure and planning uncertainty.

US-France Digital Tax Dispute

Washington has threatened 100% tariffs on French wine and champagne unless Paris drops its 3% digital services tax, which raised about $700 million in 2025. The dispute could broaden transatlantic trade friction and complicate pricing, exports, and investment planning.

US Trade Probe Escalation

Washington has opened a third Section 301 investigation into Vietnam, this time on intellectual property, alongside overcapacity and forced-labor probes. With Vietnam’s US trade surplus reaching US$178.2 billion in 2025, exporters face tariff, compliance, and customer-diversification pressure.

High interest rates constrain demand

Brazil’s central bank cut the Selic only cautiously to 14.25%, while inflation and core readings remain above target. Elevated borrowing costs will keep pressure on corporate financing, consumer demand, working capital, and project returns across trade, retail, logistics, and manufacturing.

Energy Import Vulnerability Intensifies

South Korea remains highly exposed to Middle East disruption through oil and LNG imports, with around 57% of oil sourced there and LNG benchmark prices having spiked sharply. Higher fuel, freight and input costs threaten manufacturing margins, inflation and logistics reliability.

Trade Policy Volatility Increases

Australia faces a less predictable external trade environment as major partners increasingly use tariffs, security arguments and supply-chain standards as commercial tools. Businesses should expect more fragmented market access conditions, greater documentation demands and a premium on diversification across customers and routes.

China Exposure Drives Policy Pressure

Washington is using the USMCA review to reduce Chinese and broader Asian content in North American supply chains. Scrutiny is rising in autos, chemicals, pharmaceuticals, and medical devices, while Mexico’s own tariffs on some Asian vehicle imports show growing pressure to localize sourcing and tighten trade compliance.

Tech Regulation and Privacy Risks

Canada’s proposed lawful-access Bill C-22 has triggered warnings from Signal, Apple, Google, Meta and VPN providers that they may limit services or exit. Metadata retention requirements and perceived encryption risks could raise regulatory costs, deter digital investment, and complicate data governance for businesses operating in Canada.

AI Chip Export Tightening

Taipei is considering broader controls on AI chip and server sales to China, potentially criminalizing smuggling and extending restrictions beyond blacklisted firms. The shift would raise compliance costs for exporters and could reshape regional technology trade, customer screening and licensing practices.

Manufacturing Hub Upgrades Fast

Vietnam remains one of Asia’s most open economies, with trade near 170% of GDP, exports above US$400 billion, and manufacturing around 25% of output. Rising electronics and semiconductor investment is strengthening its position as a strategic diversification base for global production.

Fiscal Slippage Keeps Rates High

Brazil’s fiscal credibility is under pressure from election-year stimulus, subsidized credit and Congress-backed spending bills. With Selic at 14.5% and inflation expectations at 5.11%, financing costs, FX volatility and project hurdle rates remain elevated for investors and operators.

Banking Isolation Compliance Barriers

Even with partial sanctions easing, Iran remains largely cut off from mainstream finance through FATF blacklisting, SWIFT restrictions, and heavy AML scrutiny. Payment settlement, trade finance, insurance, and dollar clearing therefore remain structurally difficult, limiting practical market re-entry for foreign firms.

Allied Tech Alignment Pressures

The United States is pressing partners such as Taiwan and the Netherlands to align more closely on semiconductor controls. This expands the extraterritorial reach of US policy, affecting investment screening, licensing, equipment flows, and operational decisions across globally integrated technology ecosystems.

AI Chip Export Controls

Taipei is weighing stricter AI chip and server export controls to China, potentially criminalizing smuggling and widening restrictions beyond blacklisted firms. This would raise compliance burdens, alter customer access, and deepen supply-chain bifurcation across US-China technology ecosystems.

Semiconductor Geopolitical Concentration

Taiwan remains the irreplaceable hub for leading-edge semiconductor fabrication, deepening both its economic leverage and concentration risk. International firms remain exposed to chokepoints in foundry capacity, packaging, and associated ecosystems, reinforcing the need for dual sourcing, inventory buffers, and scenario planning across technology supply chains.

Data Centres Reshape Power Markets

Australia’s AI and datacentre pipeline is accelerating, with 44 projects seeking 11GW in New South Wales alone. Proposed rules requiring new renewable supply, network-cost recovery and demand flexibility could materially affect electricity pricing, site selection, permitting and infrastructure investment strategies.

Semiconductor ecosystem prioritisation

A new NITI Aayog report urges India to prioritise chip design, OSAT, advanced packaging, and compound semiconductors over costly leading-edge fabs, targeting a $120-150 billion semiconductor value chain by 2035 and shaping electronics, automotive, and industrial investment strategies.

Red Sea Shipping Exposure

Houthi threats against Israel-linked vessels have revived major maritime risk in the Red Sea and Bab el-Mandeb. Earlier attacks involved more than 100 incidents, sank four ships, and disrupted roughly $1 trillion in trade, increasing freight, insurance, and routing costs for Israel-linked supply chains.

AI Chip Export Supercycle

South Korea’s export surge is being overwhelmingly driven by semiconductors, with May exports up 53.2% year on year to a record $87.8 billion and chip exports up 169.4% to $37.2 billion, increasing concentration risk alongside major upside.