$350 Billion Investment Pact Stalled

A $350 billion South Korean investment commitment in the US, central to a new trade deal, faces delays due to parliamentary gridlock and currency concerns. The uncertainty undermines investor confidence and complicates cross-border business planning in key sectors such as technology and manufacturing.

Geopolitical Tensions and Russia Sanctions

Finland is at the forefront of EU efforts to enforce and expand sanctions against Russia, targeting oil exports and maritime services. These measures, including actions against Russia’s ‘shadow fleet’, impact energy supply chains, raise compliance costs, and heighten regional security risks for international businesses.

Geopolitical Risks in Resource Supply Chains

Global supply chain vulnerabilities, especially in critical minerals, are heightened by concentrated production in China and Russia. Australia’s efforts to build strategic reserves and diversify sourcing are crucial for business continuity, risk management, and long-term investment planning.

Yuan Internationalization and Financial Opening

China is deepening capital account opening and promoting the yuan’s global use. These efforts aim to enhance financial sector strength and support cross-border trade, but gradual reforms and market volatility require careful navigation by international investors and corporates.

Sectoral Gains in Chemicals, Textiles, IT, and Pharma

The India-EU trade deal and other FTAs immediately benefit Indian exporters in chemicals, textiles, metals, pharmaceuticals, and IT. Tariff eliminations and improved regulatory cooperation are expected to boost exports, employment, and integration into global value chains.

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.

Green Energy and Climate Leadership

India is targeting 5 million metric tons of green hydrogen annually by 2030 and has achieved 266 GW of renewable capacity. Aggressive policies and incentives are attracting global capital, making India a hub for green energy manufacturing and a leader in the global energy transition.

Macro volatility: rates, inflation, peso

Banxico paused its easing cycle, holding the policy rate at 7% amid higher inflation forecasts and trade-tension risks. Higher financing costs and exchange-rate swings affect working capital, hedging and pricing, particularly for import-dependent industries and USD-linked contracts.

Carbon Market Regulation and Opportunities

Brazil is preparing to launch a regulated carbon credit market by 2030, unlocking significant investment in forest conservation, renewable energy, and agriculture. This regulatory shift will drive demand for carbon credits, impacting polluting industries and boosting international climate finance flows.

Defence exports and geopolitical positioning

Turkey’s defence industry is expanding exports and co-production, exemplified by a reported $350m arms agreement with Egypt and large-scale drone manufacturing capacity growth. This supports industrial upgrading and regional influence, but can elevate sanctions, licensing and reputational due-diligence requirements.

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.

Critical Minerals Strategy Accelerates

Canada is rapidly advancing its critical minerals sector, with new provincial and federal strategies, international partnerships (notably with India), and investment in recycling. This positions Canada as a key supplier for global EV, battery, and tech supply chains, reducing reliance on China.

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.

Fiscal consolidation and tax changes

War-related spending lifted debt and deficit pressures, prompting IMF calls for faster consolidation and potential VAT/income tax hikes. Businesses should expect tighter budgets, shifting incentives, and possible demand impacts, while monitoring sovereign financing conditions and government procurement.

Shifting Trade Partnerships and Diversification

US unpredictability has prompted partners like India, the EU, and others to seek alternative trade relationships, including new deals with China. This diversification reduces US leverage, alters global trade flows, and impacts long-term market positioning for multinationals.

Auto sector disruption and China competition

Chinese vehicle imports are surging, widening the China trade gap and intensifying pressure on local manufacturing. Government is courting Chinese investment (e.g., potential plant transfers) while considering trade defenses and new-energy-vehicle policy. Suppliers face localisation shifts, pricing pressure and policy uncertainty.

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.

Privatisation and SOE restructuring

Government plans broader privatisation after PIA and targets loss-making SOEs to reduce fiscal drain. Transaction structure, governance and regulatory clarity will shape opportunities in aviation, energy distribution and logistics, while policy reversals could elevate political and contract risk.

Energy balance: gas, power reliability

Declining domestic gas output and seasonal demand spikes raise LNG import needs and elevate power-supply stress. Businesses face risks of higher tariffs, intermittent load management, and input-cost volatility for energy-intensive manufacturing. Energy contracts, backup generation, and efficiency investments are increasingly material.

Energy Independence and Import Reduction

The government is aggressively pursuing energy independence by reducing fuel imports through refinery upgrades, biofuel mandates, and new gas infrastructure. These efforts aim to lower import bills, stabilize the rupiah, and create new opportunities for energy sector investment.

Electricity grid reform uncertainty

Eskom’s revised unbundling keeps transmission assets inside Eskom, limiting the new TSO’s ability to raise capital for urgent grid expansion. Business warns this policy “U-turn” could prolong grid constraints, delay renewables connections, and revive supply insecurity for operations.

Critical Minerals and Rare Earths Geopolitics

Brazil’s vast reserves of lithium and rare earths are now central to EU and US supply chain strategies, as both seek to reduce dependence on China. New agreements position Brazil as a key supplier for the global energy transition, but value addition and local benefit remain challenges.

Hydrogen and ammonia export corridors

Saudi firms are building future clean-fuel export pathways, including planned ammonia shipments from Yanbu to Rostock starting around 2030 and waste-to-hydrogen/SAF partnerships. These signal emerging offtake markets, new industrial clusters, and long-lead infrastructure requirements for investors.

Gaza Conflict Drives Regional Instability

The ongoing Gaza conflict, including ceasefire violations and humanitarian crises, continues to destabilize Israel’s security environment and regional relations. This volatility disrupts trade, investment, and supply chains, while raising reputational and operational risks for international businesses.

Energy Independence and Import Reduction

Indonesia is aggressively pursuing energy independence by halting imports of solar, gasoline, and jet fuel by 2027. Supported by refinery upgrades and biofuel mandates, these policies are expected to boost domestic industry, reduce trade deficits, and enhance energy security.

Indigenous Partnerships in Resource Projects

New agreements ensure Indigenous participation and ownership in critical minerals and infrastructure projects, especially in Western and Northern Canada. This approach enhances project legitimacy, streamlines permitting, and aligns with ESG expectations for international investors.

US Tariffs Disrupt German Exports

Recent US tariffs have led to a 9.4% drop in German exports to the US, particularly impacting the automotive and machinery sectors. The resulting volatility and unpredictability in transatlantic trade relations are forcing German businesses to seek alternative markets and reconsider investment strategies.

Tariff rationalisation amid protectionism

Recent tariff schedules cut duties on many inputs, improving manufacturing cost structures, while maintaining high protection on finished goods in select sectors. This mix changes sourcing decisions, compliance requirements, and effective protection rates, influencing export orientation versus domestic-market rent-seeking.

Labor Reform: Forty-Hour Workweek

Mexico is phasing in a 40-hour workweek by 2030, with gradual reductions starting in 2026. The reform aims to improve productivity and worker welfare, but may increase costs for businesses, especially SMEs, and require enhanced labor inspection and compliance.

US-China Trade Truce and Tariffs

The recent US-China trade truce has led to reduced tariffs and eased tensions, supporting a 2.4% US growth forecast for 2026. This stabilization benefits global supply chains and trade flows, yet ongoing rivalry and policy unpredictability remain significant risks for international businesses.

Regulatory unpredictability and enforcement

Sector-focused campaigns and uneven local enforcement create compliance uncertainty in areas such as antitrust, national security reviews, and ESG/labor enforcement. International firms should expect faster investigations, reputational exposure, and the need for stronger internal controls and local engagement.

Canada’s Strategic Autonomy and Defense Spending

Canada is doubling defense spending by 2030 and building domestic resilience in critical sectors. This policy aims to strengthen sovereignty and reduce vulnerability to external coercion, impacting procurement, industrial partnerships, and the defense supply chain landscape.

Downstream Industrialization and Value Addition

Indonesia continues to prioritize downstream processing in mining and energy, leveraging foreign investment—especially from China—to move up the value chain. This strategy increases export value, supports job creation, and enhances industrial competitiveness.

Tech export controls tighten supply

Expanded controls on AI chips, advanced semiconductors, and tooling constrain sales into China and other sensitive markets, while raising compliance burdens worldwide. Firms must redesign products, segment customer access, and harden end‑use diligence to avoid penalties and sudden shipment stoppages.

Decarbonisation incentives for heavy industry

A new A$321m grants round under the Powering the Regions Fund supports Safeguard Mechanism covered facilities to cut emissions, funding up to 50% of project costs. It boosts demand for clean-tech, electrification and low-carbon materials while increasing compliance expectations for high emitters.

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.