Return to Homepage
Image

Mission Grey Daily Brief - September 04, 2024

Summary of the Global Situation for Businesses and Investors

The global situation remains dynamic, with ongoing geopolitical tensions and economic shifts. In Europe, Germany faces economic woes and a rising far-right, while Turkey and Egypt seek to strengthen ties. Putin's visit to Mongolia sparks controversy due to an ICC arrest warrant. China faces pressure from Biden's climate negotiator and is accused of spreading disinformation ahead of the US election. Iran faces scrutiny for a surge in executions. Mexico's new president takes office amid concerns over Cuban influence.

Germany's Economic and Political Challenges

Germany's economy faces challenges, with Volkswagen and Intel reconsidering their investments. High energy costs, reduced demand from China, and competition from low-cost Chinese manufacturers have impacted Germany's manufacturing sector, which has been in recession since 2022. German companies are investing more in the US, and less in China and Germany. This trend may continue as companies seek to reduce costs and maintain profitability.

Turkey-Egypt Relations

Turkey and Egypt are seeking to strengthen their relationship, with Egyptian President Abdel Fattah el-Sisi visiting Ankara. They plan to sign agreements on economic, trade, energy, and other issues, with a goal to increase trade volume to $15 billion in five years. They will also discuss the war between Israel and Hamas and provide humanitarian aid to Gaza. This marks a turning point in Turkish-Egyptian ties, indicating a normalization of relations between the two countries.

Putin's Visit to Mongolia

Russian President Vladimir Putin visited Mongolia, despite an International Criminal Court (ICC) arrest warrant. Mongolia's failure to arrest him was criticized by Ukraine as a blow to international justice. Putin received a warm welcome, including a red-carpet reception from his Mongolian counterpart. This visit highlights the tensions between those seeking to hold Putin accountable and countries that continue to engage with Russia.

China's Disinformation Campaign and Climate Negotiations

China is accused of spreading disinformation ahead of the US election, with a network of fake accounts posing as American voters to criticize politicians and sow division. This campaign, known as "Spamouflage," has been identified by researchers and is believed to be a Chinese state-run operation. Meanwhile, Biden's top climate negotiator will visit Beijing to press Chinese leaders to cut greenhouse gas emissions. This trip is seen as a final opportunity before the November election to push China to act on global warming.

Risks and Opportunities

  • Risk: Germany's economic woes and the potential exit of major companies could lead to further political instability and a rise in populism, impacting the business environment.
  • Opportunity: Turkey and Egypt's improved relations open up opportunities for businesses in both countries, particularly in the economic, trade, and energy sectors.
  • Risk: Putin's visit to Mongolia highlights the potential for countries to shield him from the ICC arrest warrant, which could impact international relations and efforts to hold him accountable.
  • Risk: China's disinformation campaign aims to undermine confidence in US elections and democracy. Businesses should be aware of potential social and political instability caused by such campaigns.
  • Opportunity: Biden's climate negotiator visiting China presents a chance for progress on emissions reductions, which could benefit companies investing in or transitioning to renewable energy.

Iran's Surge in Executions

A United Nations report finds that executions in Iran surged in August, with a lack of transparency surrounding the official numbers. Nearly half of the executions were related to drug offenses, which goes against international standards. Iran's government is urged to halt all executions to prevent the potential loss of innocent lives.

Mexico's New President and Cuban Influence

Mexico's president-elect, Claudia Sheinbaum, will take office soon. There are concerns about the influence of Cuba, particularly the role of Havana in overseeing the dismantling of democracy in Mexico, similar to Venezuela and Nicaragua. Sheinbaum's policies and actions will shape Mexico's political and economic landscape, with potential implications for businesses operating in the country.

Recommendations for Businesses and Investors

  • Monitor Germany's economic and political situation, and be prepared for potential instability and policy shifts.
  • Explore opportunities in Turkey and Egypt, particularly in sectors targeted by their agreements, such as energy, trade, and investments.
  • Consider the potential implications of Putin's visit to Mongolia and the response from Ukraine and the ICC.
  • Be vigilant against disinformation campaigns targeting elections and democracies, and support efforts to counter such activities.
  • Stay informed about China's progress on emissions reductions and explore opportunities in renewable energy.
  • Businesses in Mexico should closely follow policy changes under the new president and assess their potential impact on operations.

Further Reading:

'Damaging Germany': Scholz expresses worry after success of far right in regional elections - FRANCE 24 English

'The ideological spirit and forces driving regime change in Mexico are from Havana' - DIARIO DE CUBA

Biden’s Top Climate Negotiator to Visit China This Week - The New York Times

China is pushing divisive political messages online using fake U.S. voters - NPR

China-linked 'Spamouflage' network mimics Americans online to sway US political debate - ABC News

Erdoğan to host Egyptian President el-Sisi in Ankara - Hurriyet Daily News

Facing ICC arrest warrant, Putin’s state visit to Mongolia sparks controversy - South China Morning Post

Hard Numbers: Putin visits Mongolia, France hears horror case, Deadly Kabul blast, Half a million for a rager, Japan tries to kick back, Guyana makes record blow bust - GZERO Media

Iran slammed for record surge in executions of regime opponents: 'true face is on display' - Fox News

Is Germany in crisis? Giants consider pulling billions from economy - Fortune

Themes around the World:

Flag

Nickel Policy Drives Global Supply Chains

Indonesia’s tightening of nickel ore production quotas and crackdown on illegal mining directly impacts 65% of global supply. These moves, aimed at boosting domestic processing, create volatility in battery and EV supply chains and influence global commodity prices.

Flag

Supply Chain Diversification and Resilience

India is positioning itself as an alternative to China for global supply chains, leveraging policy incentives, infrastructure upgrades, and trade agreements. However, external shocks—such as US tariffs and currency volatility—remain key risks for supply chain stability and export growth.

Flag

Energy Transition Drives Infrastructure Investment

Australia is accelerating its shift to renewables, with major wind, battery, and waste-to-energy projects underway. Policy incentives and private investment are transforming the energy landscape, but grid stability concerns and regulatory complexity challenge business planning and long-term investment strategies.

Flag

Environmental Licensing and Climate Policy Reform

Brazil’s new General Environmental Licensing Law streamlines approvals for business projects, while COP 30 participation and new climate governance policies signal a commitment to sustainable development. These changes reduce regulatory bottlenecks but also require compliance with stricter environmental and emissions standards.

Flag

Discounted Russian Oil Reshapes Markets

Deep discounts on Russian crude—up to $35 per barrel below Brent—have shifted market dynamics, particularly in Asia. While this supports Russian export volumes, it erodes state revenues and creates volatility in global oil pricing, affecting competitors and downstream industries worldwide.

Flag

China decoupling in advanced tech

Tightened export controls and new duties on advanced semiconductors/AI chips are reshaping global electronics supply chains. Firms face licensing, compliance, and redesign costs, while China accelerates substitution. Expect higher component prices, longer qualification cycles, and intensified scrutiny of technology transfers.

Flag

Chabahar Port and Regional Connectivity Setbacks

US sanctions and tariffs have forced India to scale back its investment in Iran’s Chabahar port, a critical node for regional trade and access to Central Asia. The project’s future is uncertain, undermining Iran’s ambitions as a logistics hub and limiting diversification of supply routes.

Flag

Suez Canal Disruptions and Revenue Loss

Regional conflicts, particularly the Gaza war, have caused significant disruptions to Suez Canal traffic, resulting in an estimated $9 billion revenue loss over two years. Rerouted shipping increases global supply chain costs and reduces Egypt’s vital foreign exchange earnings, impacting trade and fiscal stability.

Flag

Expanded secondary sanctions via tariffs

Washington is blending sanctions and trade tools, including a proposed blanket 25% tariff on imports from any country trading with Iran. This “long-arm” approach raises compliance costs, forces enhanced supply-chain due diligence, and increases retaliation and WTO-dispute risk for multinationals.

Flag

Trade Performance and Export Growth

Egypt’s non-oil exports rose 17% in 2025, narrowing the trade deficit and boosting foreign exchange. The government targets $145 billion in annual exports, leveraging trade agreements with the EU, US, Africa, and Arab states to diversify markets and support industrial growth.

Flag

Reshoring and Supply Chain Sovereignty

US policy is shifting decisively toward domestic production and supply chain resilience, with $2.5 billion allocated for critical minerals and incentives for reshoring. This move, highlighted at Davos, signals a structural pivot away from globalism, impacting sourcing strategies and operational costs for multinationals.

Flag

Export Growth and Trade Diplomacy

Turkey targets $410 billion in exports for 2025, with significant growth in both goods and services. The government is actively negotiating with the EU to update the Customs Union, aiming to further integrate with global markets and strengthen trade resilience amid rising global protectionism.

Flag

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.

Flag

US Tariff Threats Disrupt Trade

President Trump's threat of up to 25% tariffs on German and European goods over the Greenland dispute has triggered market volatility, undermined export confidence, and threatens Germany’s export-driven industries. The automotive, machinery, and luxury sectors face immediate risks, with potential for broader economic and supply chain disruption if escalation continues.

Flag

London’s Fragile Business Confidence

London remains the UK’s economic engine, but business confidence is undermined by regulatory uncertainty, high costs, and policy instability. International trade, investment, and infrastructure projects continue, yet firms demand long-term policy clarity to support growth and global competitiveness.

Flag

US fiscal dysfunction and shutdown risk

Recurring shutdown threats and funding brinkmanship can disrupt federal procurement, permitting, and regulatory processing. While some enforcement bodies continue operating, uncertainty affects travel, customs coordination, infrastructure programs, and contractor cashflow—raising operational contingencies for firms dependent on federal interfaces.

Flag

Surge in Foreign Direct Investment Inflows

Foreign investment in Germany more than doubled to €96 billion in 2025, reflecting confidence in its stability, legal certainty, and EU market access. This trend strengthens Germany’s position as a European business hub, but also increases scrutiny on strategic sectors and regulatory frameworks.

Flag

Mining Sector Pressures and Logistics

Mining output declined 2.7% in late 2025 due to falling coal and iron ore production, rising costs, and logistical constraints. Global trade tensions, especially with the US and China, further threaten export volumes and investor confidence in this critical sector.

Flag

Critical Minerals Supply Chain Realignment

Australia is rapidly expanding its critical minerals sector, including rare earths, lithium, gallium, and scandium, to reduce reliance on China and support allied supply chains. Strategic stockpiles and new mining projects are reshaping global supply chains, attracting major international investment and government backing.

Flag

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.

Flag

Administrative Delays and Bureaucratic Risks

The rapid rollout of new shelter regulations has strained local planning offices, causing project approval delays. This increases operational risk for developers and international investors, with potential for missed deadlines and higher holding costs.

Flag

US-India trade deal recalibration

A framework for a reciprocal interim US–India agreement signals selective tariff relief tied to market-access concessions and rules-of-origin tightening. Companies should expect changing duty rates across textiles, chemicals, machinery and pharma inputs, plus increased focus on standards, NTBs, and supply-chain resilience clauses.

Flag

Foreign Investment Scrutiny and Security

US authorities have tightened restrictions on foreign, especially Chinese, investment in strategic sectors and real estate near sensitive sites. Expanded CFIUS powers and state-level laws increase compliance burdens and impact cross-border M&A and supply chain localization.

Flag

Energy Security and Infrastructure Deals

A new 15-year gas agreement with Azerbaijan and major investments in natural gas and renewables are central to Turkey’s drive for energy security and reduced import dependency. These moves enhance industrial competitiveness and supply chain resilience.

Flag

Strategic Partnerships and Economic Security

Japan is deepening strategic partnerships with the EU, Italy, and India, focusing on critical minerals, AI, and defense cooperation. These alliances aim to de-risk supply chains, foster innovation, and reinforce Japan’s role in Indo-Pacific and global economic security frameworks, offering new opportunities for international investors.

Flag

Robust Non-Oil Growth Bolsters Economic Outlook

Saudi Arabia’s GDP grew 4.5% in 2025, with non-oil sectors expanding 4.9%. Sustained growth in non-hydrocarbon industries is enhancing economic resilience, supporting demand for international goods and services, and diversifying the Kingdom’s role in global supply chains.

Flag

Foreign Direct Investment Decline

Foreign direct investment into China dropped 9.5% in 2025, reflecting investor caution amid regulatory scrutiny and geopolitical tensions. While some countries increased investments, the overall decline signals challenges for China’s business climate and global integration.

Flag

Market Volatility and Recession Fears

Global markets have reacted with volatility to the tariff threats, with safe-haven assets like gold surging and defense stocks rising. Analysts warn the UK could be dragged into recession, with particular risk to key sectors such as manufacturing, whisky, and automotive exports.

Flag

International ‘Board of Peace’ Governance Experiment

The US-led ‘Board of Peace’—involving multiple global actors—aims to oversee Gaza’s reconstruction and security. Israel’s recent agreement to participate marks a policy shift. However, questions over legitimacy, authority, and buy-in from Palestinians and Hamas create operational and reputational risks for international businesses.

Flag

Macroeconomic Stabilization and Reform Momentum

Pakistan has achieved notable macroeconomic stabilization, with inflation dropping to 4.5–5.5%, policy rates declining to 10.5%, and foreign reserves rising to $16.1 billion. Structural reforms, fiscal discipline, and privatization are improving investor sentiment and positioning Pakistan as a more attractive investment destination.

Flag

Chinese Imports Challenge Local Industry

A surge in Chinese vehicle imports has widened South Africa’s trade deficit with China, threatening the competitiveness of the domestic automotive sector—a major employer and exporter. This trend may impact local manufacturing, supply chains, and trade sustainability.

Flag

Infrastructure Concessions Drive Investment Surge

A record wave of infrastructure concessions—50 auctions in 2023-2025—has attracted over R$229 billion in private investment, especially in ports, highways, and energy. This shift to private sector-led development is improving logistics but also exposes projects to regulatory, financial, and execution risks.

Flag

Capital Controls Tighten Amid Fiscal Strain

New regulations require declarations for cash exports over $100,000 and restrict gold bar movements. These controls aim to curb capital flight, increase transparency, and stabilize the ruble, but may deter foreign investment and complicate international financial operations in Russia.

Flag

Labor Mobility and Skills Partnerships

Germany is expanding labor mobility agreements, especially with India, to address skilled labor shortages. Visa facilitation, joint education initiatives, and skilling partnerships are expected to ease talent flows, benefiting sectors such as healthcare, IT, and advanced manufacturing.

Flag

Strategic Autonomy in Defense and Technology

France is accelerating defense spending and urging local industry to modernize, but also warns of shifting procurement to European suppliers if domestic firms lag. This push for strategic autonomy impacts supply chains, procurement strategies, and cross-border industrial cooperation.

Flag

Semiconductor Reshoring and Taiwan Deal

A landmark US-Taiwan trade agreement lowers tariffs to 15% and secures $250 billion in Taiwanese semiconductor investment, with TSMC expanding US operations. This accelerates domestic chip manufacturing, reshapes supply chains, and heightens strategic rivalry with China, affecting global tech sector dynamics.