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Mission Grey Daily Brief - August 11, 2024

Summary of the Global Situation for Businesses and Investors

The global situation remains dynamic, with escalating cyber activity from Iran and China, a potential copper boom in Argentina, and ongoing human rights concerns in Belarus and Chad. In the UK, far-right riots have led to a focus on the role of politicians and social media companies in tackling misinformation and hate speech.

Iran's Cyber Activity and Nuclear Ambitions

Iran has increased its online activity in an attempt to influence the upcoming US election, according to Microsoft. Iranian actors have targeted a presidential campaign with a phishing attack, created fake news sites, and impersonated activists. This comes as Iran retains Mohammad Eslami, who is on a UN blacklist for his alleged role in nuclear proliferation, as head of its atomic agency. Tehran is keen to restart talks with the West to ease sanctions over its nuclear program.

Copper Boom in Argentina

Drilling at the Los Azules mine in Argentina has confirmed a high-grade copper zone. The project is expected to produce an average of 322 million pounds of copper annually over 27 years. This discovery, along with recent legislation incentivizing investment in the mining sector, could lead to a copper boom in Argentina.

Human Rights Concerns in Belarus and Chad

Canada and its allies have imposed sanctions on Belarus and called for the release of nearly 1,400 political prisoners detained since the disputed 2020 election. The situation in Chad is also concerning, with the editor-in-chief of the country's leading online news site abducted by armed men and detained for 24 hours.

UK Far-Right Riots

London Mayor Sadiq Khan has revealed he feels unsafe as a Muslim politician in the UK due to far-right riots. He has called for harsher legislation to tackle misinformation and hate speech on social media, while Home Secretary Yvette Cooper has urged social media companies to do more to tackle extremism.

Recommendations for Businesses and Investors

  • Iran's Cyber Activity and Nuclear Ambitions: Businesses with operations or investments in Iran should closely monitor the situation and be prepared for potential instability, particularly if tensions with the US escalate.
  • Copper Boom in Argentina: The discovery of high-grade copper in Argentina presents opportunities for investors in the mining sector, particularly with the government's incentives for large-scale investments.
  • Human Rights Concerns in Belarus and Chad: Businesses with operations or supply chains in Belarus may face reputational risks due to the country's human rights abuses and support for Russia's war in Ukraine. Investors should also be cautious about investing in Belarus due to the country's unstable political situation and economic sanctions. Businesses and investors in Chad should monitor the situation and be prepared to act if media freedom continues to be threatened.
  • UK Far-Right Riots: Businesses in the UK, particularly those in the social media and tech sectors, should be aware of potential regulatory changes regarding online safety and take proactive steps to tackle misinformation and hate speech on their platforms.

Further Reading:

Canada and allies hit Belarus with new sanctions, urge prisoners’ release - Global News Toronto

Canada imposes sanctions on anniversary of fraudulent 2020 Belarus election - Toronto Star

Chad: Journalist released after 24 hours in custody in N’Djamena / FIP - International Federation of Journalists

Drilling campaign confirms high-grade copper at Loz Azules in Argentina - Mining Technology

EU and US call for the release of Belarus' political prisoners on the anniversary of mass protests - Toronto Star

France urges Kosovo to stop 'actions' irking Serbs - Arab News Pakistan

Iran is accelerating cyber activity that appears meant to influence the US election, Microsoft says - The Associated Press

Iran keeps UN-sanctioned Eslami as head of nuclear agency - DW (English)

Themes around the World:

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Regulatory and Trade Policy Uncertainty

Frequent policy shifts in trade, energy, and foreign investment—driven by geopolitical tensions and domestic priorities—create a volatile regulatory environment. Businesses face challenges in long-term planning, compliance, and risk management, particularly in sectors exposed to global supply chains and export markets.

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EU-Mercosur Free Trade Agreement

The historic EU-Mercosur agreement, signed in January 2026, eliminates tariffs on over 90% of trade between Brazil and the EU, creating the world’s largest free trade area. This is expected to boost Brazilian GDP by €6 billion by 2044, expand exports, and attract investment, but also introduces European regulatory and sustainability standards.

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Gulf Rivalry and Regional Instability

Intensifying competition with the UAE over influence in Yemen, Sudan, and Africa is fueling regional instability and media confrontations. This rivalry complicates diplomatic relations and could impact trade, investment flows, and supply chain security across the broader Gulf region.

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Environmental and ESG Regulatory Shifts

Brazil’s 2025 General Environmental Licensing Law streamlines project approvals, while the EU-Mercosur deal ties market access to Paris Agreement compliance and anti-deforestation measures. These evolving ESG standards will affect investment decisions, supply chains, and compliance costs for international businesses.

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Chronic Export Underperformance and Structural Barriers

Despite ambitious targets to reach $60 billion in exports, Pakistan’s export-to-GDP ratio has declined to 10.4%. Structural issues—such as weak infrastructure, regulatory uncertainty, and financial system crowding out private credit—continue to hamper export growth and international trade integration.

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Agribusiness Gains, But With Caveats

Brazilian agriculture stands to benefit from tariff-free access to the EU for beef, chicken, coffee, and other products. However, quotas, safeguard mechanisms, and stringent EU standards—especially on sustainability—limit upside and introduce unpredictability for exporters, affecting long-term supply chain planning.

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Semiconductor Reshoring and Tech Investment

A landmark US-Taiwan trade deal is driving $250 billion in Taiwanese investment into US semiconductor manufacturing, aiming to secure critical supply chains and reduce dependence on Asia. This reshoring effort is central to US industrial and national security strategies.

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Western Sanctions Reshape Trade Flows

Sweeping US and EU sanctions have forced Russia to redirect over 80% of its trade and energy exports to 'friendly' nations, notably China and India. This realignment has disrupted global supply chains, increased market volatility, and complicated compliance for international businesses.

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Chronic Energy Crisis and High Tariffs

Pakistan’s power sector faces a Rs2.95 trillion cost burden in 2026, with industrial tariffs at 12.9 cents/kWh—over double China’s rates. High energy costs and unreliable supply undermine export competitiveness, disrupt supply chains, and deter foreign direct investment in manufacturing and services.

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Renewable Energy Expansion and Investment

Turkey achieved record wind energy growth in 2025, surpassing 14,700 MW installed capacity, and is preparing for its first offshore wind tenders. Predictable policy and financing conditions attract both domestic and foreign investors, positioning Turkey as a regional clean energy hub.

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Supply Chain Realignment for Shelter Materials

The new legal requirements are driving increased demand for specialized construction materials, ventilation, and reinforced concrete. This is prompting supply chain adjustments, nearshoring strategies, and opportunities for international suppliers, but also risks of bottlenecks and price volatility.

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Aggressive Land Reclamation and Regulatory Risk

The government’s plan to reclaim 4–5 million hectares from plantation and mining firms heightens regulatory and asset security risks. This campaign impacts palm oil, forestry, and mining, raising concerns about policy stability, compliance costs, and foreign investor confidence.

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Political Uncertainty and Regulatory Reform

Political instability, policy inconsistency, and upcoming elections in 2026 heighten regulatory risk. Recent reforms in competition law, land equity audits, and foreign investment rules are closely watched by investors, as shifts in governance and regulatory direction could impact market access and business operations.

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Escalating Cross-Strait Tensions

China’s military drills, incursions, and amphibious exercises near Taiwan have intensified, raising the risk of conflict. These tensions threaten regional stability and global supply chains, prompting increased US arms sales and defense cooperation with Taiwan.

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Energy Security and Eskom Reform

South Africa’s improved energy stability, following Eskom’s R254 billion bailout and operational reforms, has reduced load shedding and restored investor confidence. However, high electricity costs and municipal debt remain risks for energy-intensive industries and future investment.

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2026 Presidential Election and Policy Volatility

The 2026 US presidential election introduces significant policy uncertainty, especially regarding trade, tariffs, and foreign investment. Shifts in administration priorities could rapidly alter the regulatory landscape, impacting global business strategies and risk assessments.

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Regional Diplomacy and Trade Policy Uncertainty

Israel’s diplomatic maneuvering—balancing US, Egyptian, and broader regional interests—creates a fluid trade policy environment. Ongoing negotiations over border management, reconstruction, and security arrangements introduce unpredictability for cross-border trade, investment flows, and multinational business strategies.

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Political Instability and Security Risks

2025 was Pakistan’s deadliest year in a decade, with over 3,400 killings and violence up 34%. Persistent instability, especially in Khyber Pakhtunkhwa and Balochistan, increases operational risk, disrupts logistics, and raises costs for international businesses, particularly in energy, mining, and infrastructure.

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Gold Reserves Offset Asset Freezes

Russia’s gold reserves rose by $216 billion since 2022, now making up 43% of its international reserves. This windfall has partly offset the impact of $300 billion in frozen Western assets, providing Moscow with financial resilience despite sanctions and isolation.

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Digital Finance and Stablecoin Experimentation

Pakistan’s partnership with World Liberty Financial, linked to the Trump family, on a dollar-pegged stablecoin signals a bold shift toward digital finance. The initiative aims to streamline remittances and attract blockchain investment, but raises regulatory, ethical, and geopolitical concerns.

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Eastern Economic Corridor Bottlenecks

Land shortages and zoning constraints in the Eastern Economic Corridor (EEC) are delaying major industrial projects. The government is fast-tracking reforms, but prolonged regulatory processes and infrastructure gaps may hinder investment and supply chain expansion.

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Regulatory Change and Investment Climate

Major reforms, such as the shift from non-dom to residence-based taxation, are reshaping the UK’s attractiveness for high-net-worth individuals and foreign investors. Policy uncertainty and ongoing reviews could influence capital flows, entrepreneurship, and business location decisions.

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Export Diversification and Market Shift

China has offset declining US trade by expanding exports to Africa (up 26.5%), Southeast Asia (up 14%), and Latin America (up 8%). This diversification strategy reduces reliance on Western markets, strengthens ties with the Global South, and reshapes global trade flows.

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China-Brazil Trade Deepening

China remains Brazil’s largest trading partner, with trade volumes rising despite global tensions. Brazil’s exports to China, notably in agriculture and minerals, are growing, but dependency on Chinese demand exposes Brazil to external shocks and policy shifts in Beijing.

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Competitive Tensions and Strategic Alliances

Major French automakers, including Renault and Stellantis, are expanding their electrified portfolios but show reluctance to fully align on joint battery ventures. This rivalry shapes the pace of innovation, localization of supply chains, and the scope for international partnerships.

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Economic Stability Amid Global Volatility

Praised by the OECD, Australia’s economic management has delivered low unemployment, controlled inflation, and avoided recession. Ongoing reforms in energy, competition, and housing policy underpin a stable environment for international trade and investment, though global uncertainty and productivity challenges persist.

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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.

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Semiconductor Policy Reshapes Supply Chains

The US imposed a 25% tariff on advanced semiconductor exports to China, while striking a landmark $250 billion investment and tariff reduction deal with Taiwan. These moves aim to boost US chip manufacturing and supply chain security, but risk further decoupling and global supply chain realignment.

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War-Driven Energy Infrastructure Crisis

Relentless Russian strikes have damaged Ukraine’s energy grid, causing blackouts for millions and threatening business continuity. Over 600 attacks in the past year have forced emergency imports and repairs, with export and industrial production severely impacted, undermining investor confidence and supply chain reliability.

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Energy Infrastructure Under Severe Strain

Russian attacks have devastated Ukraine’s power grid, causing widespread outages and a declared energy emergency. Persistent winter conditions and infrastructure damage disrupt business operations, threaten supply chains, and require urgent imports and international support for repairs and resilience.

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Regulatory and Economic Reform Momentum

Recent reforms, including public-private partnerships in energy and logistics, have improved investor sentiment. South Africa’s removal from the FATF greylist and credit rating upgrades signal progress, but policy uncertainty and slow execution remain barriers to sustained investment and economic growth.

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Strategic Trade Pact Engagements Expand

South Korea is actively seeking entry into the CPTPP and deepening trade ties with Japan and other partners. These efforts aim to secure market access, strengthen supply chain cooperation, and offset risks from bilateral tensions with major economies.

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EU Trade Policy and Retaliation Tools

The EU is preparing coordinated responses to US trade pressure, including potential counter-tariffs and use of the Anti-Coercion Instrument. The risk of a broader trade conflict is rising, with EU leaders emphasizing unity and strategic action to protect European industries and uphold rules-based trade amid escalating US demands.

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Infrastructure Investment Pipeline Expansion

India’s government has launched a Rs 17 lakh crore PPP project pipeline with 852 projects, spanning roads, power, ports, and railways. This initiative provides medium-term investment visibility, boosts private sector participation, and underpins India’s long-term competitiveness in trade and logistics.

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Trade Policy Uncertainty and EU-Mercosur Tensions

Strong domestic opposition to the EU-Mercosur trade deal, especially from French farmers and parliament, has led to protests and political crises. This uncertainty affects market access, supply chains, and investment strategies for global agribusiness and exporters.

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LNG Export Expansion and Energy Policy

US LNG export capacity is expanding, with new projects and regulatory filings, aiming to supply global markets and support allies’ energy security. This growth strengthens US influence in energy geopolitics but raises questions about domestic energy costs and environmental impacts.