Mission Grey Daily Brief - September 18, 2024

Summary of the Global Situation for Businesses and Investors

The global situation is marked by ongoing geopolitical tensions, economic shifts, and social unrest. In Lebanon and Syria, a wave of explosions killed and wounded hundreds, exacerbating tensions with Israel. Azerbaijan continues its advocacy against neo-colonialism, condemning the Netherlands' colonial control over Caribbean territories. Bangladesh faces economic challenges, with the World Bank pledging over $2 billion in support, while protests and political upheaval persist. Belgium witnessed strikes and protests against Audi's factory closure, impacting thousands of jobs. China strengthens cultural ties with New Zealand through celebrations in Christchurch. The US withdraws troops from Niger, and tensions rise between Lebanon and Israel. Australia admits to incorrectly editing footage of soldiers in Afghanistan. Ethiopia launches a Tourism Satellite Account to maximize the economic potential of its tourism sector. Austria considers purchasing new trainer jets, showcasing its air power. US-South Korea relations are strengthened through economic and security cooperation. Colombia attracts foreign investment with Everest Insurance's expansion. Romania and Croatia experience a surge in work permits granted to non-EU citizens. Brazil calls for Cuba's removal from the US terrorist list, citing economic suffering.

Lebanon-Israel Tensions Escalate

Lebanon and Syria experienced a wave of simultaneous explosions targeting handheld pagers, resulting in fatalities and mass casualties, including members of Hezbollah and a wounded Iranian ambassador. This incident, occurring amid rising tensions, has been attributed to Israel by Lebanese officials, exacerbating the volatile situation between the two countries. The Lebanese Health Ministry urged hospitals to prepare for emergency patients and advised people to stay away from pagers and wireless devices. This development underscores the fragile security situation in the region and highlights the potential risks to businesses operating in or near these areas.

Azerbaijan's Stand Against Neo-Colonialism

Azerbaijan, through the Baku Initiative Group (BIG), has condemned the Netherlands' colonial control over its Caribbean territories. Despite being supposedly autonomous, these territories are argued to be fully dependent on the Kingdom of the Netherlands, and their removal from the UN list of non-self-governing territories raises concerns about premature exclusion from decolonization efforts. Azerbaijan's advocacy against neo-colonialism aims to defend the sovereignty and independence of affected nations, particularly in the Caribbean. This stance has been reinforced by an international conference in August 2023, where the island of Bonaire announced plans to submit a draft resolution to the UN General Assembly for relisting and decolonization. Businesses should be cautious when investing in countries with colonial ties, as it may lead to instability and ethical concerns.

Economic Challenges in Bangladesh

Bangladesh faces economic challenges following Prime Minister Sheikh Hasina's resignation and protests over wage increases. The World Bank has pledged over $2 billion in soft loans and grants to support critical reforms and address the country's financial needs. The funds will be used for various key areas, including natural disaster response and economic reforms, with a focus on creating opportunities for the country's youth. The United States has also committed to providing additional aid of $202 million to support Bangladesh's inclusive economic growth. However, the country is still appealing for $5 billion in aid to stabilize its economy, which has been struggling since the Ukraine war increased fuel and food import costs. Businesses and investors should monitor the situation and assess the potential impact on their operations in Bangladesh, considering the country's ongoing political and economic uncertainties.

Belgium Protests Audi Factory Closure

Belgium witnessed protests in Brussels against Audi's decision to close its factory in Forest, impacting 3,000 jobs directly and many more indirectly through subcontractors and co-contractors. Trade unions have called for a strike day in solidarity and demanded a support plan to maintain industrial jobs. They criticized politicians for their apparent indifference and argued that austerity measures imposed by the European Union are counter-productive. The unions also emphasized the need for a strong industrial plan to protect quality jobs and investments. This situation highlights the social and economic consequences of such decisions and the importance of considering the wider impact on communities and industries. Businesses should be mindful of the potential disruption to their operations and supply chains when making strategic decisions.

Risks and Opportunities

Risk: The escalating tensions between Lebanon and Israel pose risks to businesses operating in the region, with potential disruptions to operations and supply chains.
Opportunity: Azerbaijan's advocacy against neo-colonialism presents an opportunity for businesses to support and promote ethical practices, respecting the sovereignty and independence of affected nations.
Risk: The economic challenges and political upheaval in Bangladesh may lead to instability and increased risks for businesses operating in the country.
Opportunity: The World Bank's financial support and reforms in Bangladesh could create opportunities for businesses to contribute to the country's economic growth and development.
Risk: The Audi factory closure in Belgium highlights the risks associated with industrial job losses and the potential for social unrest.
Opportunity: Belgium's call for a strong industrial plan and reindustrialization presents an opportunity for businesses to invest in innovative and dynamic sectors, creating quality jobs.

Themes around the World:

Escalating US Tariff Policy Volatility

Recent months have seen the US intensify its use of tariffs as a strategic tool, with threats of 100% tariffs on Canadian goods and new sectoral levies. This volatility increases uncertainty for global supply chains and investment planning, impacting cross-border trade flows and business costs.

Eastern Economic Corridor Bottlenecks

Land shortages, regulatory delays, and infrastructure constraints in the Eastern Economic Corridor (EEC) are stalling high-value investment projects. The government is prioritizing zoning reforms and expanding investment to new regions, directly affecting supply chain planning and industrial expansion.

Renewable Energy Policy Uncertainty

Despite record renewable capacity additions, delays in France’s energy roadmap and stalled projects undermine investor confidence and threaten jobs. Continued dependence on imported fossil fuels (70% of energy needs) exposes France to geopolitical shocks and energy price volatility.

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.

Manufacturing Competitiveness and PLI Schemes

Production-Linked Incentive (PLI) schemes have attracted $22.2 billion in investments across 14 sectors, generating $207.9 billion in new production and 1.26 million jobs. These policies are boosting electronics, pharmaceuticals, and specialty chemicals, enhancing India’s role in global value chains.

Defense budget politics and capability delivery

Parliamentary standoffs over a roughly US$40bn defense plan and proposed cuts create uncertainty around procurement timelines, mobilization readiness, and resilience investments. Heightened political risk can affect ratings, contractor pipelines, and business continuity planning for critical suppliers.

EU partnership deepens market access

Vietnam–EU ties were upgraded to a comprehensive strategic partnership, reinforcing the EVFTA-driven trade surge (two-way trade about US$73.8bn in 2025) and opening new cooperation on infrastructure, cybersecurity, and supply-chain security—supporting diversification away from US/China shocks.

Shareholder activism and governance shifts

Japan’s record M&A cycle and activist pressure are reshaping capital allocation and control structures. Elliott opposed Toyota Industries’ take-private price, while Fuji Media launched a ¥235bn buyback to exit an activist stake. Deal risk, valuation scrutiny, and governance expectations are rising for investors.

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.

Semiconductor reshoring accelerates

Japan is deepening economic-security industrial policy around chips. TSMC plans 3‑nanometer production in Kumamoto, with reported investment around $17bn, while Tokyo considers additional subsidies. This strengthens local supply clusters but intensifies competition for land, power, engineers, and suppliers.

Private Sector Expansion and Economic Reform

Egypt aims for the private sector to account for over 70% of total investment by 2030, up from 65% currently. Structural reforms focus on limiting state spending, enhancing transparency, and fostering a competitive business environment for international investors.

Supply Chain Resilience and Nearshoring

Canadian policy emphasizes strengthening domestic supply chains, especially for critical minerals and EVs, and leveraging nearshoring opportunities. Investments in infrastructure and technology aim to reduce vulnerabilities exposed by global disruptions and geopolitical tensions.

Supply Chain Volatility and Raw Material Risks

Germany’s modular sector faces heightened exposure to global raw material price swings, especially in steel and timber. Sourcing diversification and strategic partnerships are becoming critical as cost volatility impacts margins, contract stability, and long-term investment planning.

US Tariffs and Trade Tensions

Vietnam faces significant headwinds from persistent US tariffs, currently at 20% on key exports, with further tariff proposals under debate. These measures threaten export revenues, supply chain stability, and investment planning, especially for US-focused manufacturers.

Low Growth Outlook Amid Fiscal Constraints

The IMF forecasts modest GDP growth of 1.4% in 2026, constrained by domestic structural issues and global risks. Fiscal vulnerabilities limit policy response capacity, making South Africa’s recovery fragile and heightening the need for increased investment and productivity improvements.

EV manufacturing shift and competition

Thailand’s EV ramp-up is rapid: 2025 BEV production +632% to 70,914 units; sales +80% to 120,301. Chinese-linked supply chains expand as legacy OEMs rationalize capacity. Opportunities rise in batteries, components, and charging, alongside policy and localization requirements.

US Section 232 chip tariffs

US semiconductor tariff planning and AI-chip measures create uncertainty on chips and derivative products. Korea may need “investment-for-exemptions” negotiations similar to Taiwan’s offset model, influencing where fabs, packaging, and R&D are located and affecting compliance, pricing, and market access strategies.

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.

USMCA Uncertainty and Trade Policy

The 2026 USMCA review introduces significant uncertainty for Mexico’s trade and investment climate. Potential renegotiation or non-renewal, new US tariffs, and stricter rules of origin could disrupt supply chains, especially in automotive, manufacturing, and critical minerals, impacting cross-border operations and investment planning.

Shadow Economy and Sanctions Evasion

Iran’s reliance on shadow fleets, barter trade, and crypto channels to bypass sanctions has grown. US Treasury actions against crypto exchanges and shipping networks highlight enforcement risks for counterparties and the need for enhanced due diligence in all Iran-linked transactions.

Energy Sector Reform and Investment

Mexico is opening its energy sector to private and foreign investment through mixed contracts and partnerships, especially in oil and power generation. However, Pemex’s financial instability and regulatory uncertainty persist, impacting energy costs, supply reliability, and long-term investment decisions.

EU-UK Relations and Market Access

The UK government is exploring closer alignment with the EU single market to offset Brexit-related losses. Improved EU ties could boost UK GDP and productivity, but ongoing trade tensions and regulatory divergence continue to hamper seamless access for UK firms to the EU market.

Climate Policy and Infrastructure Investment Uncertainty

US climate and infrastructure policy shifts, including reversals of clean energy initiatives, create uncertainty for global investors. Geopolitical competition over infrastructure standards and data systems is intensifying, impacting long-term planning for sustainable business operations.

Outbound investment screening expands

New U.S. outbound investment restrictions for semiconductors, quantum, and advanced AI create approval or notification burdens for cross-border deals and R&D. Companies must reassess Asia tech exposure, ring-fence sensitive IP, and build deal timelines around regulatory review risk.

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.

Global Supply Chain Realignment

US tariff policies and geopolitical frictions have accelerated the diversification of supply chains away from China. Southeast Asian countries, notably Indonesia and Thailand, gained significant US sourcing share in 2025, reshaping manufacturing and logistics strategies for international businesses.

Critical Minerals and Supply Chain Security

The US government is investing $2.5 billion in a Strategic Resilience Reserve to secure critical minerals, awarding contracts to domestic producers. This policy aims to reduce import dependency, enhance national security, and drive supply chain resilience in defense, energy, and advanced manufacturing sectors.

Supply Chain Diversification and Resilience

Amid US tariffs and rising protectionism, China has diversified export markets and supply chains, boosting trade with ASEAN, Africa, and Latin America. However, supply chain ‘reallocation’ through third countries keeps China central to global manufacturing, complicating true decoupling efforts.

Vision 2030 Economic Diversification Drive

Saudi Arabia’s Vision 2030 continues to drive economic transformation, reducing oil dependency and expanding into sectors like mining, tourism, and technology. This shift is attracting record foreign investment, opening new markets, and reshaping the business environment for international firms.

Wage growth versus inflation

Spring ‘shunto’ negotiations aim to sustain at least 5% wage hikes for a third year, after two years above 5%, to restore falling real wages. Outcomes will influence domestic demand, retail pricing, service-sector margins, and labor cost assumptions for multinationals operating in Japan.

Supply Chain Resilience and Diversification

South Korea and the EU are launching a dedicated supply chain dialogue to reduce dependence on specific countries and diversify channels. This initiative, driven by US-China competition, aims to enhance resilience and strategic partnerships, affecting sourcing and logistics decisions for international firms.

Inflation Moderation and Economic Stability

After peaking at 64% in 2023, inflation is projected to fall below 20% by end-2026. Economic growth continues, with GDP expanding 3.7% in early 2025. Stabilizing inflation and steady growth support a more predictable business environment for international operations and investment planning.

Border trade decentralization, barter

Tehran is delegating emergency import powers to border provinces, enabling direct imports, simplified customs, and barter to secure essentials under sanctions and conflict risk. This creates localized regulatory variance, higher compliance ambiguity, and opportunities for regional traders with elevated corruption risk.

EU Green Deal and Carbon Border Adjustment

The EU’s Carbon Border Adjustment Mechanism (CBAM), effective from January 2026, imposes new costs and compliance requirements on Turkish exporters of carbon-intensive goods. Sectors such as steel, cement, and chemicals face increased regulatory scrutiny, affecting export competitiveness and supply chain strategies.

Immigration compliance crackdown on sponsorship

New offences targeting adverts for false visa sponsorships and intensified enforcement reflect tougher Home Office posture. Employers in logistics, care, hospitality and tech face higher due-diligence and audit expectations, potential licence risk, recruitment friction and reputational exposure in supply chains.

Investment Climate Reforms Accelerate

Indonesia’s government has streamlined investment licensing through the OSS system and risk-based regulation, issuing 175 automatic permits in early 2026. These reforms improve investor confidence, reduce bureaucratic delays, and create a more predictable business environment.