Return to Homepage
Image

Mission Grey Daily Brief - September 24, 2024

Summary of the Global Situation for Businesses and Investors

As global leaders gather at the United Nations, pressure mounts on President Biden to loosen restrictions on Ukraine's use of weapons. Meanwhile, China amplifies Russian war propaganda, influencing public opinion worldwide. In Britain, Prime Minister Keir Starmer faces challenges as he restricts payments for retirees. Lastly, Sri Lanka's new president, Anura Kumara Dissanayake, takes office, marking a potential shift in the country's foreign relations.

Ukraine Seeks More Weapons from the West

As the war in Ukraine enters its third year, President Volodymyr Zelensky is pushing for permission from President Biden to use longer-range weapons supplied by NATO to strike deeper inside Russia. This request comes as Ukraine slowly loses ground to mass Russian assaults in the Donbas region, and as Russian strikes target civilian infrastructure ahead of the approaching winter.

European lawmakers are urging EU member states to lift restrictions on Ukraine's use of Western weapons, arguing that the current limitations hinder Ukraine's ability to defend itself under international law. However, President Biden has been reluctant to escalate the conflict and risk a direct confrontation with Russia, as Putin already blames NATO for the war and has made veiled threats of nuclear retaliation.

China Amplifies Russian War Propaganda

China has emerged as a key player in the information war surrounding the Russia-Ukraine conflict. Through media strategies, China has shifted blame for the war from Russia to NATO and the US, even though Ukraine is not a NATO member. This alignment with Russian narratives stems from a strategic agreement between the two countries, creating an "echo chamber" effect.

China's primary objective appears to be criticizing Western countries, particularly the US and NATO, rather than showing genuine concern for Ukraine. Chinese media has drawn false distinctions between the Ukrainian government and its people, echoing Russian propaganda. This collaboration extends beyond the war, with Chinese media amplifying Russian narratives about Taiwan.

Britain's Prime Minister Faces Challenges

Britain's Prime Minister, Keir Starmer, is facing challenges as his Labour Party, which won a parliamentary majority in the July election with only 34% of the vote, takes a tough stance on economic issues. Starmer has restricted payments that help retirees with heating costs and has warned of impending budget cuts, causing concern among his allies and the British public.

As Starmer prepares to address his party's annual conference, analysts expect him to shift his tone and emphasize how the government's early harsh measures will lead to long-term benefits for Britain. Starmer is likely to highlight the legacy of issues he inherited and pivot to discussing structural changes that will strengthen the country.

Sri Lanka's New President Takes Office

Sri Lanka's new president, Anura Kumara Dissanayake (AKD), has been sworn in, marking a potential shift in the country's foreign relations. AKD, a 55-year-old Marxist leader, is known for his anti-India stance and proximity to China. His election comes after mass protests in 2022 that ousted the previous president, Gotabaya Rajapaksa, and his clan from power.

AKD campaigned as the candidate of "change," promising economic relief and an end to corruption. He has pledged to renegotiate the terms of the IMF bailout and abolish the powerful executive presidency. With China already leasing the strategic Hambantota Port, AKD's election poses a challenge to India's interests in the region.

Recommendations for Businesses and Investors

  • Ukraine-Russia Conflict: The conflict's impact on energy prices and supply chains should be closely monitored, especially with winter approaching. Businesses should assess their exposure to the region and consider supply chain diversification.

  • China's Propaganda Machine: Businesses should be cautious of operating in countries that heavily censor information and manipulate public opinion, such as China. Investing in countries with free media and strong democratic institutions reduces the risk of unexpected shifts in public sentiment and government policies.

  • Britain's Political Landscape: Businesses should consider how Starmer's potential long-term structural changes could impact their operations in Britain. While the current government's tough economic stance may cause short-term challenges, the focus on structural reforms could lead to a more stable and predictable business environment in the long term.

  • Sri Lanka's Foreign Relations: Companies investing in Sri Lanka should monitor the new president's foreign policy decisions, particularly regarding relations with China and India. A shift towards China could increase the country's debt burden and impact its ability to secure favorable trade deals with other nations.

Stay informed and stay resilient. Mission Grey is here to help you navigate the complex global landscape.


Further Reading:

As U.N. Meets, Pressure Mounts on Biden to Loosen Up on Arms for Ukraine - The New York Times

As Vietnam’s President Visits UN, ‘Carbon Neutrality’ Vanishes at Home - Asia Sentinel

At Least 16 Injured In Russian Air Strikes On Ukraine's Zaporizhzhya - Radio Free Europe / Radio Liberty

Britain's far right is hoping to strengthen its national presence - Le Monde

Britain’s Prime Minister, Bruised by a Dispute Over Freebies, Badly Needs a Reset - The New York Times

Chinese media amplifies Russia’s war propaganda, Taiwan watches warily - Euromaidan Press

Curfew lifted, change arrives: A firsthand view of Sri Lanka’s historic election - The Interpreter

Envisioning a better peace in Ukraine - The Strategist

Europe at odds with public on escalating war in Ukraine - Responsible Statecraft

Is Sri Lanka’s new president Anura Kumara Dissanayake bad news for India? - Firstpost

Themes around the World:

Flag

Supply Chain Vulnerabilities in Key Sectors

French supply chains, especially in automotive, luxury goods, and agriculture, are exposed to global trade shocks and tariff threats. Disruptions risk profit margins, force supply chain realignment, and may accelerate production shifts abroad, challenging France’s industrial competitiveness.

Flag

US-Australia Strategic Partnership Deepens

Recent agreements on critical minerals and defense supply chains signal a deepening US-Australia strategic partnership. Joint initiatives aim to counter China’s dominance in key sectors, strengthen Indo-Pacific security, and foster investment in advanced manufacturing and technology.

Flag

Chronic Economic Instability and Reform Imperative

Pakistan faces persistent economic instability, marked by declining foreign investment, high debt, and inflation. Structural reforms, improved governance, and policy consistency are urgently needed to restore investor confidence and enable sustainable growth, directly impacting international business strategies.

Flag

Fragmented Export Strategy Hinders Growth

France’s export support system remains fragmented, with exports lagging behind Germany and Italy. Calls for a unified ‘France brand’ and streamlined export promotion highlight the need for reform to boost competitiveness and international market share.

Flag

US-Led Board of Peace Reshapes Governance

The establishment of the US-chaired Board of Peace, with Israel as a member, is redefining post-war Gaza governance and reconstruction. The board’s broad mandate and financial requirements create new frameworks for international engagement, but also provoke political tensions and uncertainty for investors.

Flag

Trade Diversification Amid US Tariffs

Facing 50% US tariffs, India has accelerated trade agreements with the EU, UK, Oman, and New Zealand. This strategic pivot reduces dependence on the US, hedges against protectionism, and opens new markets for labor-intensive and technology-driven exports.

Flag

EU Trade Policy Realignment and Protectionism

Germany is navigating shifting EU trade policies, including new deals with India and Mercosur, and stricter rules on public funding for non-European production. Rising protectionism and regulatory changes could alter market access, supply chain strategies, and compliance costs for multinationals.

Flag

Geopolitical Uncertainty and Peace Negotiations

US-brokered peace talks with Russia continue, but unresolved issues over territorial concessions and security guarantees create deep uncertainty for investors. The outcome will shape Ukraine’s future market access, reconstruction, and integration with the EU.

Flag

Critical Minerals and Rare Earths Geopolitics

Brazil’s vast reserves of lithium and rare earths are now central to EU and US supply chain strategies, as both seek to reduce dependence on China. New agreements position Brazil as a key supplier for the global energy transition, but value addition and local benefit remain challenges.

Flag

Sluggish Growth and Structural Reform

Thailand’s GDP growth is projected at just 1.5–2.0% for 2026, the lowest in three years, driven by weak exports, currency appreciation, and political uncertainty. This stagnation is prompting urgent calls for structural reforms, impacting investment strategies and business confidence.

Flag

Resilient But Cooling Labor Market

US labor market growth has slowed, with job demand tepid and unemployment stabilizing. While not yet signaling recession, this cooling trend affects wage pressures, consumer demand, and strategic workforce planning for international investors and operators.

Flag

US Sanctions and Export Controls Expansion

Recent US sanctions target Iranian officials, financial networks, and entities involved in human rights abuses and illicit oil trade. These measures extend to third-country actors, increasing legal and reputational risks for international firms and complicating global financial transactions.

Flag

Political Polarization and Governance Challenges

Internal political polarization, social media-driven disinformation, and civil-military dynamics affect policy continuity and governance. These factors create uncertainty for international investors and complicate long-term business planning in Pakistan.

Flag

China-Japan Economic Tensions Escalate

China has imposed new export restrictions on rare earths and dual-use goods to Japan, weaponizing resource dependency amid Taiwan-related tensions. Japanese industries face supply chain disruptions, prompting urgent diversification of critical mineral sources and G7 cooperation.

Flag

Critical Minerals Supply Chain Resilience

Mexico is central to trilateral efforts with the US, EU, and Japan to secure critical mineral supply chains. Coordinated policies, investment, and new trade frameworks aim to mitigate vulnerabilities, diversify sources, and support strategic industries such as EVs and electronics.

Flag

Security Risks and Regional Tensions

Persistent cross-border terrorism, especially from Afghanistan, and heightened tensions with India threaten supply chains, infrastructure, and investor sentiment. Security alliances with China and Saudi Arabia aim to mitigate risks, but instability remains a critical factor for international business operations.

Flag

Debt Crisis and Fiscal Pressures

Egypt faces acute fiscal stress, with external debt exceeding $161 billion and controversial proposals to swap strategic assets for debt relief. The military’s economic dominance and reluctance to release reserves hinder effective crisis management, while IMF-mandated reforms require reduced state and military roles in the economy.

Flag

Retaliatory Tariffs and Trade War Risks

The EU is preparing a €93bn retaliatory tariff package and considering activating its ‘trade bazooka’ anti-coercion instrument. A tit-for-tat tariff spiral could significantly disrupt UK supply chains, raise costs, and depress cross-border investment, with global recession risks rising.

Flag

Energy Transition and Nuclear Expansion

South Korea’s commitment to build two new nuclear reactors by 2038 reflects a strategic pivot toward clean energy and carbon neutrality. This policy shift impacts energy-intensive industries, investment in renewables, and long-term infrastructure planning.

Flag

EU Tightens Oil Price Cap Measures

The European Union will lower the Russian oil price cap to $44.1 per barrel from February 2026, intensifying restrictions on Russian crude and refined products. Russia has responded with export bans under price cap contracts, further complicating global energy supply chains and compliance for international traders.

Flag

Strategic Reset With China

Canada and China have entered a new era of economic partnership, marked by reduced tariffs on electric vehicles and canola, and expanded cooperation in energy, finance, and agriculture. This recalibration aims to diversify Canada’s trade and investment flows, reducing overdependence on the US market.

Flag

EU-Mercosur Trade Deal Backlash

The imminent EU-Mercosur trade agreement faces strong opposition from French farmers and political factions, who fear market flooding by cheaper imports and threats to food security. Protests and government support measures highlight deep divisions, affecting agricultural supply chains and broader trade policy.

Flag

Foreign Investment Screening Strengthens

CFIUS and related US authorities have broadened scrutiny of inbound and outbound investments, particularly in critical technologies and infrastructure. This trend increases regulatory uncertainty and due diligence costs for international investors and cross-border M&A activity.

Flag

Accelerated Economic Reform Agenda

Vietnam’s leadership has committed to sweeping economic and administrative reforms, targeting over 10% annual GDP growth through 2030. This includes bureaucratic streamlining, private sector empowerment, and innovation, with significant implications for investment climate and business operations.

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

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.

Flag

EU Customs Union Modernization Stalemate

Efforts to modernize the EU-Turkey Customs Union remain stalled, despite strong business community support. The outdated framework limits market access and creates non-tariff barriers, constraining Turkey’s export growth and integration with European supply chains.

Flag

Indigenous Partnerships in Resource Projects

New agreements ensure Indigenous participation and ownership in critical minerals and infrastructure projects, especially in Western and Northern Canada. This approach enhances project legitimacy, streamlines permitting, and aligns with ESG expectations for international investors.

Flag

Energy Security and Long-Term LNG Deals

Japan secured a 27-year LNG supply agreement with Qatar, ensuring stable energy for power generation and industrial growth. This move supports Japan’s energy transition and mitigates risks from volatile global markets, benefiting sectors like data centers and advanced manufacturing.

Flag

Escalating US-South Korea Trade Tensions

The abrupt US tariff hike from 15% to 25% on South Korean autos, pharmaceuticals, and other goods marks a sharp escalation in bilateral trade tensions. This move disrupts supply chains, threatens export competitiveness, and injects volatility into investment strategies, especially in the automotive sector.

Flag

Regional Trade Expansion and Diversification

Turkey is rapidly expanding trade with Gulf countries and the UK, with bilateral trade with Kuwait up 52% and UK trade targeted at $40 billion. These efforts reduce dependency on traditional partners and open new investment and supply chain opportunities.

Flag

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.

Flag

Escalating Australia-China Trade Tensions

Australia is considering tariffs and quotas on Chinese steel imports to protect domestic industry, risking renewed trade hostilities with China. Such measures could trigger retaliatory actions, impacting sectors reliant on Chinese markets and complicating bilateral investment flows.

Flag

Shifting Foreign Direct Investment Patterns

Foreign direct investment in the US reached $5.71 trillion by end-2024, but trends show growing scrutiny of inbound deals, especially in strategic sectors. Regulatory reviews and geopolitical considerations are influencing investment flows and partnership structures.

Flag

Geopolitical Alliances and Trade Policy Coordination

US trade and investment policies are increasingly intertwined with geopolitical alliances, as seen in evolving US-South Korea agreements and pressure on Indo-Pacific partners to align with US strategic interests. This affects market access, regulatory frameworks, and supply chain security for international businesses.

Flag

Hamas Disarmament and Security Dilemmas

The demilitarization of Hamas remains a central, unresolved issue. US and Israeli insistence on full disarmament is met with resistance, and the lack of clear enforcement mechanisms heightens the risk of renewed conflict, affecting supply chains, insurance costs, and investment planning.