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
Drilling campaign confirms high-grade copper at Loz Azules in Argentina - Mining Technology
France urges Kosovo to stop 'actions' irking Serbs - Arab News Pakistan
Iran keeps UN-sanctioned Eslami as head of nuclear agency - DW (English)
Themes around the World:
Carbon border and ETS policy shifts
Changes to UK carbon pricing and the forthcoming Carbon Border Adjustment Mechanism raise exposure for heavy industry, particularly steel, with some estimates of carbon costs rising toward £250m by 2031 and higher later. Import competitiveness, pricing, and procurement strategies will shift.
FX and capital-flow volatility exposure
Global risk-off moves and US rate expectations are driving sharp swings in KRW and equities, with reported weekly foreign equity outflows around $5.3bn and large one-day won moves. Volatility complicates hedging, profit repatriation, and import-cost forecasting for Korea-based operations.
Critical minerals de-risking drive
Budget measures and diplomacy intensify to reduce reliance on China, including rare earth corridors across coastal states and customs-duty relief for processing equipment. India is also negotiating critical-minerals partnerships with Brazil, Canada, France and the Netherlands, reshaping sourcing strategies.
Foreign Direct Investment Decline
UK foreign direct investment projects fell by 13% in 2024, reflecting investor caution amid regulatory uncertainty and economic headwinds. This trend affects capital inflows, job creation, and the UK's attractiveness as a business destination.
Landmark India-EU Free Trade Agreement
India’s comprehensive FTA with the EU, concluded in January 2026, eliminates tariffs on 90% of Indian exports and expands market access for goods and services. This deal will significantly boost bilateral trade, attract FDI, and enhance supply chain resilience, positioning India as a key alternative to China.
Geopolitical Shifts and Regional Integration
Turkey's strategic location is increasingly pivotal amid shifting global alliances, conflicts in Ukraine and the Middle East, and EU enlargement debates. Ankara's foreign policy emphasizes regional cooperation, energy corridors, and mediation roles, affecting supply chains and cross-border investments.
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.
Export controls on advanced computing
U.S. national-security export controls on AI chips, tools, and know-how remain a central constraint on tech trade with China and other destinations. Companies must harden classification, licensing, and customer due diligence, while planning for sudden rule changes and market loss.
Election, coalition, constitutional rewrite
February 2026 election and constitutional referendum (about 60% “yes”) reshape Thailand’s policy trajectory. Coalition bargaining and court oversight risks can delay budgets, permits, and reforms, affecting investor confidence, PPP timelines, and regulatory predictability for foreign operators.
Black Sea Grain Exports Remain Volatile
Ukraine’s grain exports through the Black Sea are subject to ongoing security threats and corridor disruptions. The uncertainty around export agreements and maritime safety continues to affect global food prices and the reliability of agricultural supply chains.
Currency management and capital controls
Beijing’s preference for financial stability sustains managed exchange-rate policy and episodic tightening on capital outflows. Firms face repatriation frictions, FX hedging costs, and potential constraints on intercompany funding, dividends, and cross-border M&A execution timing and approvals.
Data (Use and Access) Act shift
The DUAA’s main provisions are in force, expanding ICO investigative powers and raising potential PECR fines up to £17.5m or 4% of global turnover. Firms must reassess data-governance, consent, product design, vendor risk and UK‑EU data-transfer posture.
Industrial Competitiveness Risks
Brazil’s industrial sector faces higher production costs than Europe, risking deindustrialization as tariff barriers fall under new trade agreements. Without robust industrial policies, Brazil may see increased imports and reduced local investment in high-value sectors.
China EV import quota tensions
A new arrangement allows up to 49,000 Chinese-made EVs annually at low duties, while excluding them from new rebates. This creates competitive pressure on domestic producers and raises security, standards, and political-risk concerns—potentially triggering U.S. retaliation or additional screening measures.
Digital and privacy enforcement intensity
France’s CNIL stepped up enforcement, with 2025 sanctions reportedly totaling about €486m, focused on cookies, employee monitoring and data security. Multinationals face higher compliance costs, faster audit cycles, and greater liability for cross‑border data transfers and AI use.
Currency Collapse Fuels Economic Instability
The Iranian rial’s collapse—losing over 50% of its value in 2025—has triggered hyperinflation, supply chain breakdowns, and widespread business closures. Volatile exchange rates and dollar scarcity undermine contract reliability, price stability, and the viability of trade and investment.
Competitive Dynamics and Asian Market Pressure
French and European battery firms face increasing competition from Asian manufacturers, especially Chinese players with aggressive expansion and lower costs. This dynamic is reshaping supply chains, pricing, and strategic alliances in the second-life battery sector.
Balochistan security threatens projects
Militant violence in Balochistan is disrupting logistics and deterring FDI, including audits and security redesigns around the $7bn Reko Diq project. Attacks on rail and highways raise insurance, security and schedule costs for mining, energy, and corridor-linked supply chains.
Critical minerals export controls
China’s expanding controls on dual-use goods and critical minerals (rare earths, gallium) and licensing slowdowns—seen in Japan-related restrictions and buyers diversifying to Kazakhstan—create acute input risk for semiconductors, EVs, aerospace, and defense-linked manufacturing worldwide.
AI Basic Act compliance duties
South Korea’s AI Basic Act introduces requirements for transparency and labeling of AI-generated content, plus human oversight for high-impact uses in health, transport and finance. Foreign providers with large user bases may need local presence, raising compliance and operating overhead.
Massive Infrastructure Reconstruction Drive
Ukraine’s large-scale reconstruction, backed by EU and international finance, is creating significant business opportunities in transport, energy, and urban development. However, risks from ongoing conflict and corruption concerns complicate project execution and investment returns.
Surge in Green Energy Investment
A landmark $2 billion Saudi-Turkish solar energy deal will add 2,000 MW capacity, supplying 2.1 million homes and boosting local industry. This reflects Turkey’s drive to reach 120,000 MW renewable capacity by 2035, attracting foreign capital and supporting energy transition.
Semiconductor tariffs and reshoring
New U.S. tariffs on advanced AI semiconductors, alongside incentives for domestic fabrication, are reshaping electronics supply chains. Foreign suppliers may face higher landed costs, while OEMs must plan dual-sourcing, redesign bills of materials, and adjust product roadmaps amid policy uncertainty.
Sanctions expansion and enforcement intensity
U.S. sanctions policy is expanding and increasingly operational, raising shipping, insurance, and counterparty risks. New Iran measures targeted 15 entities and 14 vessels tied to the “shadow fleet” soon after nuclear talks, indicating parallel diplomacy and pressure. Firms need stronger screening and maritime due diligence.
Macro volatility and funding constraints
Infrastructure rebuild needs collide with fiscal and SOE balance-sheet limits. Eskom debt and unbundling design shape financing costs, while municipalities’ weak finances constrain service delivery. For investors, this elevates FX, interest-rate and payment-risk premiums, and lengthens due diligence on counterparties.
Digital regulation targets big tech
Regulators are escalating scrutiny of platforms and AI: the ICO and Ofcom opened investigations into X/Grok, while CMA reforms and interventions aim for faster, more predictable merger and market oversight. International tech and investors should expect higher compliance costs and deal-execution uncertainty.
Permitting and local opposition hurdles
Large battery projects face heightened scrutiny on safety and environmental grounds. In Gironde, the €500m Emme battery project on a high-Seveso site drew calls for independent risk studies, signalling potential delays, added mitigation costs and reputational risks for investors and suppliers.
Escalating Cross-Strait Geopolitical Risks
China’s intensifying military drills and threats of reunification by force heighten the risk of conflict, blockades, or supply chain disruption. This persistent tension is a critical risk factor for international investors and global business operations.
Steel and aluminum tariff escalation
Higher US aluminum and steel tariffs are driving record physical premiums and import dislocations, lifting costs for autos, aerospace, construction, and packaging. Firms face increased input inflation, renegotiation of supply contracts, and pressure to qualify domestic or alternative suppliers.
Critical Minerals Strategy Accelerates
Canada is rapidly advancing its critical minerals sector, with new provincial and federal strategies, international partnerships (notably with India), and investment in recycling. This positions Canada as a key supplier for global EV, battery, and tech supply chains, reducing reliance on China.
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.
Semiconductor reshoring and tech geopolitics
Washington continues pressing for more Taiwan chip capacity and supply-chain relocation, while Taipei calls large-scale shifts “impossible.” TSMC’s massive US buildout and parallel overseas fabs heighten capex needs, export-control exposure, and dual-footprint operational complexity for suppliers and customers.
Cross-border data and security controls
Data security enforcement and national-security framing continue to complicate cross-border transfers, cloud architecture, and vendor selection. Multinationals must design China-specific data stacks, strengthen incident reporting, and anticipate inspections affecting operations, R&D collaboration, and HR systems.
Defense rearmament boosts demand
Germany is accelerating procurement, including a €536m first tranche of loitering munitions within a €4.3bn framework and NATO long-range drone initiatives. This supports select industrial orders and dual-use tech investment, but tightens export controls, compliance, and supply competition for components.
EEC land, zoning, logistics bottlenecks
Industrial land scarcity and outdated zoning in the EEC are delaying large projects; clearing public rights-of-way can take 7–8 years. Government efforts to “unlock” constraints and restart U-Tapao Airport City PPP may reshape site selection, capex timing, and logistics planning.
Electricity market reform uncertainty
Eskom restructuring and the Electricity Regulation Amendment rollout are pivotal for stable power and competitive pricing. Debate over a truly independent transmission entity risks delaying grid expansion; 14,000km of new lines need about R440bn, affecting project timelines and energy-intensive operations.