Gaza border operations and disruption risk

Rafah crossing reopening is proceeding with tight security screening and limited volumes (initially ~150–200 people/day), affecting movement and regional stability perceptions. Escalation or administrative disputes can disrupt Sinai logistics, labor mobility, and investor risk appetite.

Defense Sector Expansion and Privatization

Israel’s defense industry is expanding internationally, with IPOs of key firms like IAI and increased exports to Europe amid heightened demand. Privatization and global partnerships enhance competitiveness, but regulatory and labor hurdles, as well as security considerations, shape the sector’s trajectory.

Rare earths processing and project pipeline

Government promotion of 49 mines and 29 processing projects, plus discoveries in gallium/scandium and magnet rare earths, supports Australia’s shift from raw exports to midstream processing. Opportunities are significant, but permitting, capex, and processing technology risk remain decisive.

Energy diversification and LNG buildout

Turkey is expanding LNG and regasification capacity, planning additional FSRU projects and targeting ~200 million m³/day intake within two years. Long-term LNG contracting (including U.S.-sourced volumes) can improve supply security, but price volatility and infrastructure bottlenecks remain.

Semiconductor controls and AI choke points

Tighter export controls, selective approvals, and new tariffs on advanced chips are reshaping global tech supply chains. Firms face compliance burdens, China retaliation risk, and higher hardware costs; U.S.-based capacity and trusted suppliers gain strategic priority.

Trade politics: EU–Mercosur backlash

French farmer protests are fueling resistance to the EU–Mercosur deal, increasing ratification delays and safeguard demands. For multinationals, this raises uncertainty for agri-food sourcing, automotive and chemicals exports, and access to South American critical minerals.

Domestic Reforms and Infrastructure Investment

Canada is fast-tracking $1 trillion in investments across energy, AI, critical minerals, and trade corridors, alongside tax reforms and interprovincial trade liberalization. These initiatives aim to boost competitiveness and supply chain resilience, presenting significant opportunities for global investors.

Regulatory and Policy Shifts for Business

Japan is implementing regulatory reforms to attract foreign investment and enhance business resilience. Policy changes in economic security, industrial strategy, and trade are designed to support supply chain diversification, technological innovation, and long-term competitiveness for international firms.

Baht strength, FX intervention bias

Foreign inflows after the election are strengthening the baht, while the Bank of Thailand signals willingness to manage excessive volatility and scrutinize gold-linked flows. A stronger currency squeezes exporters’ margins and complicates regional supply-chain cost planning and hedging strategies.

Defense export surge into Europe

Hanwha Aerospace’s ~$2.1bn Norway deal for the Chunmoo long-range fires system underscores Korea’s growing defense-industry competitiveness and government-backed “Team Korea” diplomacy. It signals expanding European demand, offset/industrial-partnership opportunities, and tighter export-control and compliance requirements.

EU Green Deal and Carbon Border Adjustment

The EU’s Carbon Border Adjustment Mechanism (CBAM), effective from January 2026, imposes new costs and compliance requirements on Turkish exporters of carbon-intensive goods. Sectors such as steel, cement, and chemicals face increased regulatory scrutiny, affecting export competitiveness and supply chain strategies.

Supply-chain bloc formation pressures

US-led efforts to build critical-minerals “preferential zones” with reference prices and tariffs signal broader de-risking blocs. Companies may face bifurcated supply chains, dual standards, and requalification of suppliers as trade rules diverge between China-centric and allied networks.

Investment Climate Amid Geopolitical Tensions

Geopolitical instability, including US-EU disputes and global conflicts, has led to increased market volatility and cautious investment. French markets have seen declines, and sectors like tech and industry face job cuts, prompting investors to adopt more defensive and selective strategies.

Strategic Contest Over Port of Darwin

Australia’s push to reclaim the Chinese-leased Port of Darwin has provoked threats of economic retaliation from Beijing. The dispute highlights the intersection of national security and trade, with potential sanctions and investment restrictions affecting broader Australia-China commercial relations.

Export Growth Amid Rising Competition

Despite global headwinds, Turkey achieved record exports in 2025, notably to the EU and Italy. However, rising input costs, increased Asian competition, and sector-specific declines (e.g., white goods) signal the need for policy support, innovation, and cost-effective production to sustain export momentum.

Regulatory Environment Grows More Complex

The US is implementing significant regulatory changes, including expanded compliance requirements and sector-specific rules. Businesses face increased costs and operational complexity, particularly in finance, technology, and manufacturing, affecting market entry and ongoing operations.

Critical minerals and rare earth push

India is building rare earth mineral corridors and magnet incentives (₹7,280 crore) to cut reliance on China (over 45% of needs). Tariff cuts on monazite and processing inputs support downstream EV/renewables supply chains, but execution and permitting remain key risks.

Regulação de dados e compliance LGPD

A Câmara aprovou MP que transforma a ANPD em agência reguladora, com carreira própria e maior capacidade de fiscalização. Isso tende a elevar enforcement, custos de conformidade e exigências contratuais, especialmente em cadeias com compartilhamento internacional de dados.

Tariff escalation and legal risk

U.S. tariff policy remains volatile, with high effective tariff rates and active litigation over emergency authorities. Companies face sudden duty changes, pricing pressure, and contract disputes, while investment timing hinges on court outcomes and negotiated exemptions across sectors.

Talent constraints and foreign hiring policy

Labor shortages in manufacturing and high-tech intensify competition for engineers and skilled technicians. Policy tweaks to attract foreign talent and expand foreign-worker quotas can help, but firms should plan for wage pressure, retention costs, and slower ramp-ups for new capacity.

Shareholder activism and governance shifts

Japan’s record M&A cycle and activist pressure are reshaping capital allocation and control structures. Elliott opposed Toyota Industries’ take-private price, while Fuji Media launched a ¥235bn buyback to exit an activist stake. Deal risk, valuation scrutiny, and governance expectations are rising for investors.

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.

USMCA, nearshoring, and critical minerals

Nearshoring to Mexico/Canada is accelerating, reinforced by U.S. critical-mineral initiatives and stricter origin enforcement. This benefits firms that regionalize supply chains, but raises audit burdens for rules-of-origin, labor content, and ESG traceability—especially in autos and batteries.

Intellectual Property Enforcement And Innovation

Vietnam is strengthening IP rights enforcement through new decrees, technological solutions, and international cooperation. Enhanced protection of intellectual property fosters a transparent business environment, boosts investor confidence, and supports the country’s innovation-driven growth.

Sanctions, Export Controls, and Geopolitics

The US continues to leverage sanctions and export controls as tools of foreign policy, targeting adversaries and sensitive sectors. These measures create compliance challenges and supply chain risks for global firms, especially in technology, defense, and critical materials.

Export target amid protectionism

Vietnam is targeting US$546–550bn exports in 2026 (+15–16% vs 2025’s record US$475bn), but faces rising protectionism, stricter standards, and dependence on foreign-invested manufacturing and imported inputs—raising compliance, sourcing, and margin risks for exporters.

High energy costs and circular debt

Electricity tariffs remain structurally high, with large capacity-payment burdens and a Rs3.23/unit debt surcharge for up to six years. Despite reform claims, elevated industrial power prices erode export competitiveness, raise production costs, and influence location decisions for energy-intensive manufacturing.

Fiscal activism and policy uncertainty

Snap election dynamics and proposed tax/spending shifts are raising fiscal-risk scrutiny for Japan’s high-debt sovereign, influencing rates, infrastructure budgets and public procurement. For investors, this can move funding costs, affect stimulus-linked sectors, and increase scenario-planning needs around policy reversals.

Domestic unrest and security crackdown

Large-scale protests and lethal repression are elevating operational and reputational risk for foreign-linked firms. Risks include curfews, disrupted labor availability, arbitrary enforcement, asset seizures, and heightened human-rights due diligence expectations from investors, banks, and regulators.

Accelerated Economic Reform Agenda

Vietnam’s leadership has committed to sweeping economic and administrative reforms, targeting over 10% annual GDP growth through 2030. This includes bureaucratic streamlining, private sector empowerment, and innovation, with significant implications for investment climate and business operations.

Critical minerals and battery supply chains

Canada is positioning itself as a “trusted supplier” of critical minerals, supporting mining, processing and battery ecosystems. This creates opportunities in offtakes and JV processing, but permitting timelines, Indigenous consultation, and infrastructure constraints can delay projects and cashflows.

Foreign investment security tightening

Ottawa is balancing growth and national security under the Investment Canada Act, amid debate about allowing greater Chinese state-owned participation in energy and resources. Case-by-case reviews increase deal uncertainty, lengthen timelines, and can impose mitigation conditions for acquirers and JVs.

Forced-labor import enforcement intensifies

CBP enforcement under the Uyghur Forced Labor Prevention Act continues to drive detentions and documentation demands, increasingly affecting complex goods. Companies need deeper tier-n traceability, auditable supplier evidence, and contingency inventory planning to avoid port holds and write-offs.

Trade balance strain with neighbors

Pakistan’s trade deficit with nine neighbors widened 44.4% to $7.68bn in H1 FY26, driven by import growth (notably China) and weaker exports. This pressures FX demand and can prompt import management measures affecting raw materials and intermediate goods availability.

Federal Reserve Policy and Political Pressures

The Federal Reserve has paused rate cuts, holding at 3.5-3.75%, amid robust GDP growth and persistent inflation. Political interference, including Supreme Court cases and leadership uncertainty, threatens Fed independence, influencing monetary policy outlook and global investor confidence.

Aerospace certification dispute escalation

A U.S.–Canada aircraft certification dispute triggered threats of 50% tariffs and decertification affecting Canadian-made aircraft and Bombardier. Even if moderated, this highlights vulnerability of regulated sectors to politicized decisions, raising compliance, delivery, leasing and MRO disruption risk.