Steel, Aluminum and Trade Defense

Sectoral tariffs and extended Canadian anti-dumping quotas are reshaping metals trade. Ottawa has kept steel and aluminum import limits in place for another year, while linking broader changes to a future U.S. deal, raising costs and compliance burdens for manufacturers.

Geopolitical Shipping and Energy Disruptions

Middle East conflict is already affecting South Korean trade through higher crude prices, shipping disruption, and weaker exports to the region, which fell 7.7% in May. Importers and manufacturers face freight, insurance, and input-cost volatility across supply chains.

Nuclear Power Attracts Industry

France’s abundant low-carbon nuclear electricity is becoming a core competitive advantage for energy-intensive manufacturing, AI computing and electrification. It supports site selection and reshoring decisions, yet growing demand from hyperscale data centers could tighten power availability and increase allocation risks for businesses.

US Tariff Dispute Escalates

Washington has proposed lifting tariffs on most Australian goods from 10% to 12.5% from July 24 under a forced-labour probe, challenging AUSFTA settings and increasing uncertainty for exporters, compliance teams, sourcing decisions, and bilateral trade planning.

Hausse des dépenses de défense

Le gouvernement vise 436 milliards d’euros de dépenses militaires d’ici 2030, malgré des débats parlementaires sur le financement. Cette orientation soutient l’aéronautique, la défense et les fournisseurs industriels, tout en accentuant les arbitrages budgétaires affectant d’autres secteurs économiques.

Green Power Infrastructure Buildout

Egypt is accelerating renewable energy, storage and green industry projects to reduce fuel stress and improve energy security. New battery projects total 1,500 MWh, with a 3,000 MWh factory planned, supporting grid resilience, industrial localization and lower long-term operating costs.

AI Infrastructure Investment Surge

France announced €93 billion of foreign investment projects at Choose France, including SoftBank’s €45 billion data-center plan through 2031. Strong nuclear-backed power availability is boosting France’s attractiveness for AI, cloud, advanced manufacturing and high-value digital infrastructure.

Migrant Labor Supply Tightening

Business groups are pressing Bangkok to renew 190,000 Cambodian work permits after earlier conflict-driven outflows from a workforce once totaling about 400,000. Agriculture, fishing and construction face acute shortages, raising wage pressures, project delays and operational risk in labor-intensive sectors.

Semiconductor Controls and Retaliation

Technology competition remains the strategic core of China risk. US restrictions on advanced chips and equipment, possible tighter limits on ASML tools, and China’s calibrated responses are sustaining uncertainty for electronics, AI, industrial automation and data-center investments tied to Chinese demand or manufacturing networks.

Industrial Policy and Localization Push

Government is doubling down on industrial policy, local procurement and tariff-backed manufacturing support, with DTIC allocated about R130.6 billion over the medium term. This can create opportunities in domestic production, but raises compliance, sourcing and market-access considerations for foreign firms.

Iran Conflict Escalation Exposure

Israeli officials have assessed a roughly 50% chance of renewed conflict with Iran, while military coordination with Washington continues. Any escalation would threaten energy markets, airspace access, shipping corridors, investor confidence, and contingency planning for companies with Middle East trade or regional assets.

Hormuz Chokepoint Disruption Risk

Iran’s assertive control of the Strait of Hormuz remains the dominant business risk, with traffic far below pre-war norms, toll disputes, mine threats and military incidents endangering a route that normally carries roughly one-fifth of global traded oil and gas.

Fiscal strain and budget reprioritization

War costs are forcing tougher budget trade-offs, with reports of at least a $28 billion overspend and Russia’s deficit widening to ₽5.9 trillion by April. More resources are being diverted to defense and security, squeezing civilian sectors and increasing policy unpredictability.

Gulf-Europe Land Corridor Momentum

Turkey and Saudi Arabia signed rail and logistics memorandums to build an overland corridor linking the Gulf, Jordan, Syria, and Turkey toward Europe. The project could cut Gulf-Europe transit from over 30 days to under two weeks, reducing maritime chokepoint exposure.

Human capital and tech pressure

Israel’s hi-tech sector, which accounts for 17% of GDP and 57% of exports, faces mounting strain from reserve duty, undercompensated student-reservists, and outward migration. Talent shortages and brain-drain concerns could weigh on innovation, startup formation, and foreign investment sentiment.

Labor Shortages and Integration Gaps

Demographic pressure and skills shortages persist, but Germany is still struggling to convert migration into labor-market relief. Only 51% of early-arriving working-age Ukrainians were employed by mid-2025, underscoring continued constraints on staffing, productivity, and expansion across labor-intensive sectors.

Exchange Rate and Import Exposure

Pakistan’s macro stabilisation has improved reserves, with external buffers reported around $16 billion, but exchange-rate flexibility remains IMF-backed policy. Importers and foreign investors still face rupee volatility, fuel-price pass-through and margin pressure on contracts, procurement and repatriation planning.

Nuclear Restarts Reshaping Power Mix

Japan is accelerating selective nuclear restarts to reduce LNG dependence and stabilize electricity costs, including Kashiwazaki-Kariwa Unit 6. Progress remains uneven because of regulatory hurdles and local opposition, leaving manufacturers exposed to continued energy-price volatility and regionally uneven power conditions.

Security Tensions Affecting Trade

Security and anti-cartel cooperation have become intertwined with trade talks as Washington links market access to law-enforcement collaboration. Bilateral friction over corruption allegations and sovereignty concerns raises political risk, complicates negotiations and clouds the operating environment for exporters and investors.

IMF-Driven Fiscal Tightening

Pakistan’s FY2026-27 budget is being shaped by IMF demands for a 2% primary surplus, roughly Rs400 billion in extra provincial revenue and broader taxation. This implies tighter liquidity, higher compliance costs and less policy flexibility for investors and import-dependent businesses.

Post-Brexit workforce composition changes

Net migration fell to 171,000 in 2025, down 82% from its 2023 peak, while non-EU inflows weakened and EU mobility remained constrained. Shifting labour supply and settlement rules could affect productivity, consumer demand, and long-term investment assumptions across the UK economy.

Saudi logistics hub acceleration

Saudi Arabia is rapidly strengthening its logistics position through Red Sea ports, overland corridors, and new shipping services. Authorities highlighted more than 19 new maritime lines and alternative routes, improving resilience and creating opportunities in warehousing, distribution, manufacturing, and cross-border supply-chain redesign.

Indo-Pacific Maritime Security Risks

With 60% of global maritime trade passing through the Indo-Pacific, Australia is prioritising freedom of navigation, maritime surveillance and port resilience through Quad initiatives, reflecting rising risks to shipping lanes, fuel imports, insurance costs and regional logistics reliability.

State Reform and Investment Climate

Ongoing reforms in state-owned enterprises, product markets and the financial sector aim to attract higher-quality private investment. If implementation holds, the medium-term business environment could improve, but execution uncertainty remains high and may delay capital allocation or partnership decisions.

Reconstruction and Aid Access Uncertainty

Gaza reconstruction remains blocked by disputes over disarmament, governance and Israeli withdrawal, while aid flows remain constrained. This delays donor-backed projects, construction demand normalization and cross-border commercial recovery, while keeping humanitarian scrutiny high for firms with regional operations or counterparties.

Logistics and Customs Modernisation

Trade negotiations with the US are explicitly targeting customs and trade facilitation, while the government continues backing infrastructure and capital expenditure. Improvements could lower clearance friction and logistics costs, but near-term disruption from fuel prices and shipping volatility persists.

Energy Import Dependence Risks

Egypt remains exposed to regional gas disruptions, especially from Israel. Israeli exports to Egypt fell about 23% to 850 million cubic feet per day in May, highlighting risks to electricity supply, industrial output, fertilizer production and energy-intensive manufacturing.

Inflation and lira fragility

Turkey’s macro risk remains dominated by inflation, lira weakness and reserve sensitivity. Market discussion of a possible US dollar swap line underscores external financing concerns, with implications for pricing, hedging, import costs, working capital and investor confidence.

Transshipment Compliance Tightens

US customs enforcement is tightening on transshipment, undervaluation, and supply-chain disclosures, directly affecting Vietnam’s role in China-plus-one manufacturing. Firms exporting to America should expect stricter origin verification, higher audit risk, and greater need for traceability across suppliers and logistics partners.

China-Linked Trade Channels Under Scrutiny

Sanctions designations naming firms in China, Hong Kong, the UAE, and Turkey highlight how Iran-linked commerce increasingly flows through third-country trading networks. Companies using Asian sourcing, petrochemical trade, or commodity intermediaries face heightened beneficial-ownership, transshipment, and sanctions-evasion due diligence requirements.

Seabed Infrastructure Security Focus

Australia has elevated protection of subsea cables and maritime chokepoints after multiple cable incidents in the Taiwan Strait and Baltic. This increases relevance of cyber-physical resilience, port and telecom contingency planning, and insurance considerations for trade-dependent operators.

EU trade asymmetry pressure

Turkey faces rising competitive pressure from the EU’s new trade deals, especially with India. Without Customs Union modernization, Turkish firms risk asymmetric market access and stronger competition in automotive, machinery, chemicals, textiles and agriculture, affecting export strategies and investment planning.

Managed US-China Trade Friction

Beijing and Washington are institutionalising a managed-trade approach rather than resolving structural disputes. A new bilateral trade board may ease tariffs on roughly $30 billion of non-strategic goods, but higher baseline US tariffs, export controls and policy unpredictability will keep sourcing, pricing and market-access risks elevated.

Hormuz Transit and Shipping Risk

Iran’s control measures and attempted tolling in the Strait of Hormuz have sharply disrupted maritime traffic, with vessel flows reportedly falling from over 100 daily to about two dozen. For businesses, this raises freight costs, insurance premiums, energy-price volatility, and rerouting risks.

Tariff Regime Reconfiguration

Washington is rebuilding its tariff toolkit after court setbacks, proposing new Section 301 duties of 10%-12.5% on 60 economies and revising Section 232 metals rules. The shift raises landed costs, pricing volatility, customs complexity, and sourcing risk for global manufacturers and importers.

State Export Control Tightens

Indonesia is centralizing exports of palm oil, coal, and ferroalloys through PT Danantara Sumberdaya Indonesia, with reporting starting June 2026 and full rollout by January 2027. The shift may improve transparency, but raises execution, compliance, and counterparty risks for traders.