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.

Political Consolidation and Policy Continuity

Recent political developments have seen To Lam re-elected as party chief, with efforts to merge top leadership roles. This centralization brings policy stability and reform momentum, but also raises concerns about checks and balances, governance transparency, and long-term institutional resilience for international investors.

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.

Mining Sector Under Pressure

Mining output has declined due to falling coal and iron ore production, rising costs, and logistical bottlenecks. Global trade tensions, especially US-China tariffs, further threaten export demand, while structural challenges and job losses persist in this critical sector for foreign exchange and employment.

US-Canada Trade Tensions Escalate

Ongoing US tariffs and President Trump’s threats to undermine the CUSMA/USMCA agreement are destabilizing North American supply chains, particularly in the auto sector. Canada faces heightened uncertainty as over 75% of its exports rely on US access, directly impacting investment and operational planning.

Export and Import Dynamics Shift

Germany’s modular building exports are rising, supported by demand for sustainable and high-quality solutions in Europe and beyond. Import trends reflect increased sourcing of advanced materials and components, impacting trade balances and supply chain strategies for global firms.

Structural Economic Challenges and Reform Agenda

Thailand faces its lowest economic growth in a decade, driven by high household debt, corruption, and an aging workforce. Political parties are prioritizing SME support, anti-corruption, digital infrastructure, and EEC revitalization, but structural reforms remain critical for sustainable long-term growth.

US-China Decoupling and Supply Chain Realignment

US-China trade relations have deteriorated, with tariffs and technology restrictions prompting companies to diversify supply chains. China’s exports to the US dropped 20% in 2025, but rerouting through third countries maintains indirect flows, complicating decoupling efforts and global sourcing strategies.

US Tariff Threats Disrupt Trade

President Trump’s threats of up to 25% tariffs on German and EU exports have destabilized markets and undermined Germany’s fragile economic recovery. These measures threaten over €250 billion in US-German trade, forcing companies to reassess supply chains, investments, and market strategies.

Geopolitical Uncertainty and Global Realignment

US trade unpredictability is prompting major economies like Germany, India, and Canada to diversify trade ties and reduce reliance on American markets. German investment in China surged 55% in 2025, and India finalized a landmark EU deal after US talks collapsed. This realignment is fragmenting global trade frameworks, increasing the complexity of cross-border investment and supply chain strategies.

Canada-China Strategic Trade Pivot

Canada’s new agreement with China lowers tariffs on Chinese EVs and secures reduced Chinese tariffs on Canadian agriculture. This shift diversifies trade but risks US retaliation, reshapes supply chains, and could attract Chinese investment in Canadian manufacturing and energy sectors.

Innovation Drive and Industrial Upgrading

Despite headwinds, China continues to invest in AI, green energy, and advanced manufacturing. The government’s focus on innovation and technological self-reliance aims to move up the value chain and sustain competitiveness, but faces challenges from external restrictions and internal imbalances.

Foreign Investment Decline and Decoupling

Foreign direct investment in China fell 9.5% in 2025, with many investors shifting to emerging markets due to geopolitical tensions, economic slowdown, and concerns over regulatory unpredictability. This trend challenges China’s long-term growth and integration with global capital markets.

Supply Chain and Border Management Uncertainty

The reopening of the Rafah border crossing and ongoing controls highlight persistent uncertainty in supply chain logistics. Restrictions on goods and movement, coupled with complex oversight, continue to challenge humanitarian aid, trade, and operational planning for international businesses.

Human Rights, Sanctions, and Diplomacy

China’s use of sanctions in response to foreign criticism—especially on human rights—remains a diplomatic lever. Recent lifting of sanctions on UK politicians signals selective engagement, but ongoing concerns over governance and rights continue to affect reputational and operational risks.

Export Controls and Technology Sanctions

US-led export controls on advanced chips and technology, especially targeting China, place Taiwan at the heart of global supply chain tensions. Compliance risks, supply bottlenecks, and retaliatory measures from China complicate operations for multinationals relying on Taiwanese tech.

High Unemployment and Labor Market Shifts

Finland’s unemployment rate has reached 10.6%, the highest in the EU, driven by weak domestic demand and structural changes. While tech and green sectors are hiring, traditional industries face layoffs, affecting consumer demand and workforce availability for international investors.

Resilient but Uneven Economic Outlook

Despite global headwinds, the US demonstrates economic resilience, with steady consumer spending and moderate inflation. However, growth is uneven across sectors, and persistent trade barriers and policy shifts continue to challenge international business operations.

Western Sanctions Erode Oil Revenues

Western sanctions and price caps have driven Russia's oil and gas revenues to a five-year low, with a 24% annual decline in 2025. This has severely impacted Russia’s fiscal stability, increasing budget deficits and forcing tax hikes, with direct implications for global energy markets and business operations.

Regulatory and Legal Enforcement on Foreign Ownership

Australian courts and regulators have imposed fines and forced divestments on foreign investors defying national interest rules, particularly in critical minerals. This robust enforcement environment increases compliance costs, legal risks, and operational uncertainty for international businesses.

Armenia–Turkey Border Reopening Prospects

The anticipated partial reopening of the Armenia–Turkey border is set to reduce logistics costs, expand market access, and boost regional trade and investment. This development could reshape supply chains and enhance Turkey’s connectivity with the Caucasus and beyond, with positive spillovers for international business.

USMCA Review and Trade Uncertainty

The 2026 review of the US-Mexico-Canada Agreement (USMCA) is underway amid rising US-Canada tensions and US protectionism. Potential reforms to rules of origin, minerals, and labor laws could reshape North American trade, impacting $665 billion in Mexican exports, mostly to the US.

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.

Belt and Road Initiative Expansion

China signed a record $213 billion in new Belt and Road deals in 2025, focusing on energy, mining, and infrastructure in Africa and Central Asia. This expansion strengthens China’s global economic footprint but raises debt and dependency concerns in partner countries.

Continental Infrastructure and African Integration

Egypt prioritizes infrastructure-led economic integration across Africa, leading projects like the Lake Victoria-Mediterranean corridor. These initiatives enhance intra-African trade, create new supply chain routes, and position Egyptian firms as key players in continental development.

Expanded secondary sanctions, tariffs

US pressure is escalating from targeted sanctions to broader secondary measures, including proposed blanket tariffs on countries trading with Iran. This raises compliance costs, narrows counterparties, and increases sudden contract disruption risk across shipping, finance, insurance, and procurement.

Labor Market Aging and Reform Debates

The employment rate for Koreans aged 55-64 exceeded 70%, intensifying debates over raising the retirement age and reforming labor policies. These demographic shifts affect workforce availability, productivity, and long-term business planning, especially in manufacturing and services.

Accelerated Push for Energy Imports and Diversification

Facing energy shortages, Ukraine is rapidly increasing electricity imports and seeking alternative energy sources. This shift creates opportunities for foreign energy suppliers and technology providers, but also exposes businesses to price volatility and regulatory changes in the energy sector.

High Energy and Tax Costs Undermine Competitiveness

Pakistan’s elevated energy tariffs and tax burdens are driving some multinational companies to exit, while others adapt through local sourcing. These costs, among the highest in the region, erode export competitiveness and deter new foreign investment, complicating business operations.

Domestic Economic Policy and Inflation Management

Turkey’s central bank continues cautious monetary easing as inflation falls to 30.9% in late 2025, with targets of 16% for 2026. Policy predictability, declining inflation, and supportive infrastructure investments are expected to foster a more stable business environment, though volatility remains a concern.

Foreign Investment and Real Estate Growth

Australia’s real estate market is projected to reach USD 306 billion by 2034, driven by population growth, infrastructure investment, and foreign capital. Government incentives and AI-driven innovation are reshaping property markets, but regulatory changes and housing affordability remain critical factors for investors.

Supply Chain Realignment and Resilience

Recent trade frictions and export controls, especially involving the US, China, and Japan, are driving South Korea to diversify supply chains and pursue trilateral cooperation. This realignment is critical for mitigating risks in high-tech manufacturing and maintaining global market access.

Foreign Direct Investment Momentum

Turkey attracted $12.4 billion in FDI in the first 11 months of 2025, a 28% year-on-year increase. The European Union remains the primary investor, with key sectors including trade, information technology, and food manufacturing. This trend signals growing international confidence and opportunities for global investors.

AI and Technology Regulation Leadership

Canada is advancing AI and digital regulation to build trust, attract investment, and protect privacy. With over 3,000 AI firms and 800,000 digital sector jobs, legislative clarity and sovereign infrastructure are central to economic resilience and international tech partnerships.

Accelerated Trade Policy Reforms

India’s government has rapidly expanded free trade agreements with the UK, New Zealand, Oman, and EFTA, recalibrating trade policy to diversify export markets and attract FDI. These reforms enhance global market access but also expose India to external risks, including US tariffs and global trade disruptions.

Energy Transition and Power Security

South Africa’s move from chronic power shortages to improved energy stability—driven by Eskom reforms, renewables expansion, and regional cooperation—has reduced loadshedding, but challenges remain around grid modernization, cyber risks, and affordable electricity for industry.