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Mission Grey Daily Brief - September 28, 2024

Summary of the Global Situation for Businesses and Investors

The global situation remains fraught with tensions and challenges. The ongoing war in Ukraine continues to dominate the geopolitical landscape, with US President Biden pledging $8 billion in security aid to Ukraine, while facing pressure from allies to ease restrictions on long-range weapons. China's military actions and aggressive rhetoric raise concerns about its intentions, potentially signaling a shift towards confrontation. Argentina's President Javier Milei delivered a scathing critique of the UN, denouncing its collectivist policies and pledging Argentina's commitment to fighting for freedom. Meanwhile, businesses in North America brace for the impact of potential port shutdowns due to labor disputes, threatening supply chains.

Ukraine-Russia Conflict

The conflict in Ukraine remains a critical issue, with global implications. US President Biden has pledged an additional $8 billion in security aid to Ukraine, including weapons and expanded F-16 fighter jet pilot training. This comes amidst Ukraine's continued push for access to long-range weapons to strike deeper inside Russia, a decision that the US has opposed due to fears of escalation. However, some NATO allies, including Britain and France, have indicated their willingness to allow Ukraine to use their long-range missiles. Ukrainian President Zelenskyy has appealed to world leaders to prioritize Ukraine's fight against Russia and warned of Russia's intentions to seize more territory. Russia's Vladimir Putin has suggested changes to Moscow's nuclear doctrine, stating that an attack by a non-nuclear nation backed by a nuclear power could be seen as a "joint attack." This development adds to the complex dynamics of the conflict and underscores the urgency of finding a resolution.

China's Military Actions

Recent actions by China have raised concerns among observers. China tested an intercontinental ballistic missile, marking the second "war signal" in 10 days, according to China expert Gordon Chang. Chang warns that Chinese President Xi Jinping may be on the verge of taking aggressive actions. Additionally, there are reports of China covering up the sinking of its newest nuclear-powered submarine, raising questions about its military capabilities and accountability. These developments come amid China's stated goal of building a world-class military and maintaining a fleet of nuclear-capable submarines. The US, UK, and Australia have responded by agreeing to produce and sell nuclear-powered attack submarines, aiming to counter China's growing military presence in the region.

Argentina's Stance on the UN

Argentina's President Javier Milei delivered a scathing speech at the UN, denouncing its collectivist policies and pledging Argentina's commitment to fighting for freedom. Milei criticized the UN's agenda as a socialist program that violates the sovereignty of nation-states and fails to address poverty and inequality effectively. He compared his speech to that of a Founding Father, advocating for limited government intervention and protection of individual rights. Milei's remarks reflect a shift in Argentina's stance on the global stage and have drawn mixed reactions.

North American Port Shutdowns

Businesses in North America are bracing for potential port shutdowns due to labor disputes, which could have severe impacts on supply chains. Approximately 45,000 dockworkers at 36 seaports along the US East Coast have threatened to strike on October 1 if their demands for better wages are not met. This could disrupt the flow of goods between the US and Canada, with $3.6 billion worth of trade crossing the border daily. Shippers are already rerouting to west coast ports, adding costs, and the situation could worsen if labor disruptions spread to Canadian ports as well. The potential shutdowns highlight the fragility of supply chains and the significant economic consequences of labor disputes.

Recommendations for Businesses and Investors

  • Ukraine-Russia Conflict: The ongoing conflict and resulting sanctions on Russia continue to impact global energy markets and supply chains. Businesses should monitor the situation and prepare for potential disruptions, especially in industries reliant on Russian or Ukrainian exports.
  • China's Military Actions: China's recent military actions and aggressive rhetoric signal a potential shift towards confrontation. Businesses with operations or investments in the region should closely follow developments and assess their exposure to geopolitical risks.
  • Argentina's Stance on the UN: Argentina's shift in stance under President Milei could impact its relations with other countries and international organizations. Investors should consider the potential impact on Argentina's economic policies and investment climate.
  • North American Port Shutdowns: The potential port shutdowns in North America highlight the importance of supply chain resilience. Businesses relying on these ports should develop contingency plans and explore alternative routes to mitigate the impact of disruptions.

Further Reading:

A U.S. port shutdown is nearing. The impact on Canada could be ‘severe’ - Global News Toronto

Ambassador: Japan’s support for Ukraine will remain steadfast, but non-lethal - Euromaidan Press

Argentina's Javier Milei DESTROYS the U.N. in SCATHING speech - iHeartRadio

Argentina's poverty rate soars past 50% under Javier Milei - DW (English)

Argentina's poverty rate spikes in first 6 months of President Milei's shock therapy - PinalCentral

As Zelenskyy visits White House, Ukrainian push to use long-range weapons continues - ABC News

At Least 15 Injured In Blast Inside Police Station In Pakistan - Radio Free Europe / Radio Liberty

Biden announces exposure of crypto network that helped Russia circumvent sanctions - Ukrainska Pravda

Biden announces ‘surge’ in Ukraine aid, action to counter Russia - Roll Call

Biden pledges $8 billion to Ukraine following Putin's proposed changes to nuclear rules - Fox News

China expert sounds alarm over 'war signals': 'Xi Jinping is about to do something truly horrendous' - Fox Business

Chinese officials cover up sinking of country’s newest nuclear-powered submarine tied to pier - Fox News

Themes around the World:

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Digital-government buildout and procurement

Government is accelerating cloud/AI adoption and “digital cleanup,” with digital-government development budget cited near 10bn baht for FY2027 and agencies targeting much higher IT spend. Opportunities rise for cloud, cybersecurity, and integration vendors, alongside procurement and interoperability risks.

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Energy security via long-term LNG

With gas about 60% of Thailand’s power mix and domestic supply shrinking, PTT, Egat and Gulf are locking in 15-year LNG contracts (e.g., 1 mtpa deals) to reduce spot-price volatility. Electricity tariff stability supports manufacturing, but contract costs and regulation remain key.

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US tariff shock and AGOA risk

US imposed 30% tariffs on South African exports in 2025, undermining AGOA preferences and creating uncertainty for autos, metals, and agriculture. Exporters face margin compression, potential job losses, and incentives to re-route supply chains or shift production footprints regionally.

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New fees, taxes, and compliance load

Egypt continues updating VAT and tax administration and adding port/terminal charges (e.g., inspection fees). Combined with evolving customs requirements such as mandatory Advance Cargo Information for air freight, compliance costs and penalties risks rise for importers and logistics providers.

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Human Rights, Sanctions, and Diplomacy

China’s use of sanctions in response to foreign criticism—especially on human rights—remains a diplomatic lever. Recent lifting of sanctions on UK politicians signals selective engagement, but ongoing concerns over governance and rights continue to affect reputational and operational risks.

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Ports capacity crunch and auction delays

Record port throughput (1.40bn tonnes in 2025, +6.1% y/y) is colliding with investment bottlenecks: 17 private terminals stalled since 2013 (R$36.8bn unrealised). Delays and legal disputes around Tecon Santos 10 raise congestion risk for containers and agro-exports.

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USMCA review and stricter origin

The 2026 USMCA joint review is moving toward tighter rules of origin, stronger enforcement, and more coordination on critical minerals. North American manufacturers should expect compliance burdens, sourcing shifts, and potential disruption to duty-free treatment for borderline products.

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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.

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Sanctions and Decoupling from Russian Energy

The EU is phasing out Russian gas by 2027 and expanding sanctions on Russia’s defense and energy sectors. Ukraine urges further asset freezes and restrictions. This shift is reshaping regional energy markets and supply chains, creating both risks and opportunities for international operators.

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Complex Sanctions and Regulatory Landscape

Ukraine’s regulatory environment is shaped by evolving sanctions on Russia and new trade controls. Businesses face compliance challenges, especially regarding dual-use goods and financial transactions, requiring constant monitoring of legal and operational risks.

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Escalating US-China Trade Tensions

Renewed tariffs, technology restrictions, and currency disputes have intensified US-China trade friction, disrupting global supply chains and investment flows. Businesses face rising costs, regulatory uncertainty, and increased risk of retaliation, impacting international operations and strategic planning.

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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.

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US Sanctions and Trade Risks

South Africa faces potential US financial sanctions and exclusion from trade agreements like AGOA, which could trigger capital flight, currency devaluation, and higher borrowing costs. These risks create significant uncertainty for foreign investors and multinational supply chains.

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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.

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Supply chain resilience and port logistics risk

Australia’s trade-dependent sectors remain sensitive to shipping availability, port capacity and industrial relations disruptions. Any bottlenecks can raise landed costs and inventory buffers, particularly for LNG, minerals and agribusiness. Firms are prioritising diversification, nearshoring and stronger contingency planning.

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Sanctions enforcement and secondary risk

U.S. sanctions on Russia, Iran, Venezuela, and related maritime “shadow” networks are increasingly enforced with supply-chain due diligence expectations. Counterparties, insurers, shippers, and banks face heightened secondary exposure, trade finance frictions, and cargo-routing constraints for energy and dual-use goods.

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Investment liberalization and market access

Saudi investment is surging, with total investment topping SR1.5 trillion ($400bn) in 2025 and FDI stock reaching SR1.05 trillion ($280bn) by Q3 2025. Capital markets opened wider from Feb. 1, reshaping entry, financing, and partnership strategies.

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China’s Strategic Export Controls

China has expanded export controls on critical minerals and technology, targeting entire supply chains. These measures, often ambiguous and reactive, create uncertainty for global manufacturers and heighten the risk of supply disruptions in sectors such as electronics, EVs, and renewable energy.

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Privatization and Industrial Restructuring

Pakistan is accelerating privatization of state-owned enterprises and restructuring its energy and manufacturing sectors. These reforms aim to attract FDI and improve competitiveness, but create transitional risks for supply chains and legacy contracts, especially in infrastructure, energy, and logistics.

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Rising Role in Regional Energy Supply

Indonesia is expanding its LNG and gas infrastructure, securing supply for power generation and industry. Projects like the FSRU Jawa Barat and new gas processing facilities support energy security, industrial growth, and regional supply chain resilience.

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Energy security and LNG contracting

Shrinking domestic gas output and delayed petroleum-law amendments increase reliance on LNG; gas supplies roughly 60% of power generation. PTT, Egat and Gulf are locking long-term LNG deals (15-year contracts, 0.8–1.0 mtpa). Electricity-price volatility and industrial costs remain key.

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Sanctions Enforcement Targets Russian Oil

France’s aggressive enforcement of sanctions against Russia’s shadow oil fleet, including high-profile tanker seizures, heightens geopolitical risk in maritime trade. This robust stance, coordinated with allies, may provoke Russian retaliation and impact global energy supply chains.

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Tax audits and digital compliance

SAT is intensifying data-driven enforcement, including audits triggered from CFDI e-invoices alone, while offering a 2026 regularization program that can forgive up to 100% of fines and surcharges. Multinationals must harden vendor due diligence, invoice controls, and customs-tax consistency.

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US–China tariff escalation risk

Persistent US tariff actions and Section 301 measures, plus partner-country spillovers (e.g., Canada EV quota deal drawing US threats), increase landed costs, compliance complexity, and transshipment scrutiny—raising uncertainty for exporters, importers, and North America–linked supply chains.

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Technological Innovation in Battery Reuse

French firms and startups are advancing second-life battery technologies, including hydrometallurgical recycling and smart energy management. These innovations improve recovery rates, reduce environmental impact, and enhance competitiveness in international trade and investment.

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Nickel quota cuts, ore scarcity

Indonesia is slashing nickel ore RKAB quotas—targeting ~250–260m wet tons vs 379m in 2025—and ordering major mines like Weda Bay to cut output. Smelters may face feedstock deficits, driving imports (15.84m tons in 2025) and price volatility.

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Санкции против арктического LNG

ЕС предлагает запрет обслуживания LNG‑танкеров и ледоколов, что бьёт по арктическим проектам и логистике. При этом в январе 2026 ЕС купил 92,6% продукции Yamal LNG (1,69 млн т), сохраняя зависимость и создавая волатильность регуляторных решений.

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Workforce nationalisation and labour reforms

Saudi authorities are tightening Saudization in selected functions (e.g., sales/marketing mandates reported up to 60% for targeted roles) alongside broader labour-law amendments. Firms must redesign HR operating models, pay structures, and compliance controls to avoid penalties and operational disruption.

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SME Funding Gap and Investment Selectivity

Despite renewed investor confidence, South Africa’s SME sector faces a R350 billion funding gap due to strict financial controls and governance requirements. Only well-structured businesses attract capital, limiting broad-based economic growth and job creation.

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Defense Build-Up and Asymmetric Deterrence

Taiwan is investing $40 billion in drones, AI-based defense systems, and advanced weaponry to counter China’s military threat. This defense modernization, heavily reliant on US support, is integral to business risk assessments and supply chain continuity planning.

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Energy shortages constrain industry

Winter peak demand is straining gas supply, with household/commercial usage reported around 611 million cubic meters per day, increasing rationing risk for industry. Power and feedstock interruptions can reduce output and reliability for manufacturing, mining, petrochemicals, and exporters.

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US–Taiwan tariff deal reshapes trade

A pending reciprocal tariff arrangement would reduce US tariffs on many Taiwanese goods (reported 20% to 15%) and grant semiconductors MFN treatment under Section 232. In exchange, large Taiwan investment pledges could shift sourcing and pricing dynamics for exporters.

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Political Polarization and Business Uncertainty

Deepening political divisions and unpredictable policy shifts, especially around elections, undermine regulatory stability and investor confidence. Businesses must navigate volatile labor, tax, and regulatory environments, increasing operational risk and complicating long-term planning.

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Russia-linked nuclear fuel exposure

France imports all uranium for its nuclear fleet and still sources about 18% of enriched uranium from Russia (~€1bn annually). Potential EU action on Russian nuclear trade could disrupt fuel logistics, compliance risk, and costs for electricity-intensive industry.

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Immigration politics and labor supply

Foreign labor is now a core election issue. Japan plans to accept up to 1.23 million workers through FY2028 via revised visas while tightening residence management and enforcement. For employers, this changes hiring pipelines, compliance burdens, and wage/retention competition.

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Dominance in Clean Energy Manufacturing

China commands about 70% of global electric vehicle and battery markets, expanding exports to Europe and Canada despite tariffs. This dominance challenges Western industrial strategies and shapes global competition in clean energy and advanced manufacturing.