Rupee flexibility and policy transmission

RBI reiterates it won’t defend a rupee level, intervening only against excessive volatility; rupee touched ~₹90/$ in Dec 2025. For importers/exporters, hedging discipline and INR cost pass-through matter as rates stay on hold and liquidity tools drive conditions.

Critical Infrastructure Security and Baltic Risks

Finland is leading regional efforts to protect critical underwater infrastructure in the Baltic Sea, establishing new monitoring centers to prevent sabotage. Heightened regional tensions and Russian military activity increase operational risks for logistics, energy, and telecom supply chains.

Dollar, Rates, and Financing Conditions

Shifts in U.S. monetary expectations and risk-off episodes tied to trade actions can strengthen the dollar and tighten financing. This affects import costs, commodity pricing, emerging-market demand, and the viability of capex-heavy supply-chain relocations, especially for leveraged manufacturers and traders.

Border trade decentralization measures

Tehran is delegating exceptional powers to border provinces to secure essential imports via simplified customs and barter-style mechanisms. This may improve resilience for basic goods but increases regulatory fragmentation, corruption exposure, and unpredictability for cross-border traders and distributors.

Surge in Foreign Investment in Germany

Foreign direct investment in Germany more than doubled to €96 billion in 2025, surpassing German outbound investment for the first time since 2003. Political stability, EU market access, and legal certainty make Germany increasingly attractive for international investors, supporting growth and supply chain resilience.

Environmental and Labor Standards Scrutiny

Foreign investment, particularly from China, faces increasing scrutiny over environmental and labor practices. Regulatory enforcement and community expectations are rising, making compliance with sustainability standards essential for maintaining social license and business continuity.

Critical minerals export leverage

China’s dominance in rare earths and magnet refining (about 70% mining, ~90% processing) increases vulnerability to licensing delays or curbs. US-led “critical minerals bloc” initiatives may accelerate decoupling, raising compliance, sourcing, and price-volatility risks.

Demographic Drag and Labor Market Shifts

China’s population declined by 3.39 million in 2025, with a record-low birth rate and 23% of citizens over 60. This demographic shift pressures the labor force, social security, and long-term growth, forcing businesses to adapt to a rapidly aging consumer base.

Electricity market and hydro reform

Le Parlement avance une réforme des barrages: passage des concessions à un régime d’autorisation, fin de contentieux UE et relance d’investissements. Mais mise aux enchères d’au moins 40% des capacités, plafonnement EDF, créent risques de prix et de contrats long terme.

BoJ tightening, yen volatility

The Bank of Japan’s post-deflation normalisation (policy rate at 0.75% after December hike) keeps FX and JGB yields volatile, raising hedging costs and repricing M&A and project finance. Authorities also signal readiness to curb disorderly yen moves.

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.

Customs crackdown on free zones

Customs plans tighter duty-exemption rules and higher per-item fines to curb false origin, under-valuation, and minimal-processing practices in free zones. Likely impacts include stricter ROO documentation, more inspections, longer clearance times, and higher compliance costs for importers and assemblers.

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.

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.

E-Commerce and Logistics Transformation

South Korea’s logistics and third-party logistics (3PL) markets are expanding rapidly, fueled by e-commerce growth, technology adoption, and sustainability efforts. The market is projected to reach $41.7 billion by 2033, with trends toward omnichannel logistics, customized solutions, and green practices shaping operational strategies.

Macroeconomic Reform and Investment Climate

Egypt’s government is accelerating macroeconomic reforms, including privatization, infrastructure upgrades, and digitalization. These measures, highlighted at Davos 2026, aim to attract long-term foreign investment, but sustained policy execution and regulatory clarity remain critical for investor confidence.

US–Taiwan Strategic Trade Pact

The new US–Taiwan trade agreement lowers tariffs on Taiwanese exports to 15%, secures preferential treatment for key sectors, and cements Taiwan’s role as a strategic US partner. This enhances market access but may provoke Chinese retaliation and regulatory uncertainty.

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.

Energy policy and OPEC+ restraint

Saudi-led OPEC+ is keeping output hikes paused through March 2026, maintaining quotas amid surplus concerns and Iran-related volatility. For businesses, oil revenue sensitivity influences public spending, FX liquidity, project pacing, and input costs, especially energy-intensive industries.

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.

AI and Technology Export Boom

Taiwan’s economy grew 8.6% in 2025, driven by surging AI-related exports and technology shipments, especially to the US. This boom supports robust corporate profits and investment, but exposes the economy to volatility from tech cycles and trade policy shifts.

US trade talks and tariff risk

Vietnam is negotiating a more “reciprocal” trade framework with the US amid tariff pressure and scrutiny of Vietnam’s export surplus. Outcomes could reshape duties, rules-of-origin enforcement and supply-chain routing, affecting apparel, electronics, and China-plus-one strategies.

Bahnnetz-Sanierung stört Logistik

Großbaustellen bei der Bahn (u.a. Köln–Hagen monatelang gesperrt) verlängern Laufzeiten im Personen- und Güterverkehr und erhöhen Ausweichkosten. Für internationale Lieferketten steigen Pufferbedarf, Lagerhaltung und multimodale Planung; zugleich bleibt die Finanzierung langfristiger Netzmodernisierung unsicher.

Escalating US-China Trade Tensions

Renewed tariffs, technology restrictions, and currency disputes have intensified US-China trade friction, disrupting global supply chains and investment flows. Businesses face rising costs, regulatory uncertainty, and increased risk of retaliation, impacting international operations and strategic planning.

FX reserves and rupee stability

External buffers improved, with liquid reserves around $21.3bn and SBP reserves near $16.1bn after IMF inflows. Nevertheless, debt repayments and current-account pressures can quickly tighten import financing, raise hedging costs, and disrupt supplier payments and inventory planning.

Environmental Enforcement and Permit Revocations

Indonesia has revoked permits for 28 companies, mainly in forestry, mining, and plantations, due to illegal deforestation and environmental violations. This signals stricter enforcement, affecting supply chains and compliance costs for resource-dependent industries.

Trade Diversification and New Markets

With exports to the US and China declining, Germany is actively pursuing trade agreements with India, Mexico, Australia, and the UAE. This diversification aims to reduce reliance on traditional markets, mitigate geopolitical risks, and unlock new growth opportunities for German exporters.

Data security and cross-border flows

China’s data-security regime continues tightening around cross-border transfers, localization, and security assessments for “important data.” Multinationals face higher compliance costs, audit exposure, and potential disruption to global IT architectures, analytics, HR systems, and cloud-based operations.

Labor Market Structural Transition

Taiwan’s labor market is undergoing structural change, driven by AI adoption, precision workforce planning, and geopolitical uncertainty. Companies face talent shortages in high-tech sectors and must adapt hiring strategies to remain competitive in a rapidly evolving environment.

Geopolitical Realignment and Supply Chain Security

Saudi Arabia is deepening ties with China, the US, and regional partners, while pursuing new defense and economic alliances. These shifts impact energy flows, supply chain resilience, and market access, requiring international businesses to closely monitor evolving geopolitical risks.

Critical Minerals and Resource Security

Canada’s vast reserves of critical minerals and natural resources have become a focal point in US-Canada tensions. Control over these assets is now central to national security and industrial policy, affecting global supply chains for energy, technology, and manufacturing sectors.

IMF-Led Economic Reform Momentum

Recent IMF engagement and disbursement of $1.2 billion have driven fiscal discipline, tax reforms, and macroeconomic stabilization. While these measures boost investor confidence, they also entail stringent conditions affecting trade, investment, and operational flexibility for foreign businesses.

Shipbuilding and LNG carrier upcycle

Korean yards are securing high-value LNG carrier orders, supported by IMO emissions rules and rising LNG project activity, with multi-year backlogs and improving profitability. This benefits industrial suppliers and financiers, while tightening shipyard capacity and delivery slots through 2028–2029.

Governance, enforcement, and asset risk

Heightened enforcement actions—permit revocations, land seizures, and talk of asset confiscation powers—are raising perceived rule-of-law risk, especially in resources. High-profile mine ownership uncertainty amplifies legal and political risk premiums, affecting M&A, project finance, and long-term operating stability.

Enerji arzı ve yerli üretim

TPAO’nun Chevron ile olası petrol-doğalgaz işbirliği ve Karadeniz gazı üretim artışı hedefleri enerji arz güvenliğini destekliyor. Orta vadede ithalat faturasını azaltma potansiyeli var; ancak proje takvimi, finansman ve jeopolitik riskler enerji maliyetlerinde dalgalanma yaratabilir.

EU-India Free Trade Agreement Signed

The EU and India have concluded a landmark free trade agreement, covering 25% of global GDP. The deal will reduce tariffs—especially on German autos and machinery—boosting exports and diversifying supply chains amid US trade unpredictability and China competition.