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Mission Grey Daily Brief - October 26, 2024

Summary of the Global Situation for Businesses and Investors

The war in Ukraine continues to dominate global affairs, with North Korean troops moving towards the frontline and Russian forces suffering record casualty rates. Elon Musk is accused of having close ties with Vladimir Putin, withholding Starlink access from Taiwan as a favour to China. US Treasury Secretary Janet Yellen announced new sanctions targeting secondary entities in countries supplying Russia with critical items for its military. Belarusian President Alexander Lukashenko threatened war if Russia attempts to annex Belarus. South Korea is threatening to arm Ukraine in response to North Korea's support for Russia. Putin hosted the BRICS summit in Russia, praising its role as a counterbalance to the West's "perverse methods", and pushing for the creation of a new payment system as an alternative to the SWIFT network. Israel launched a retaliatory strike on Iran.

Russia's War in Ukraine

The war in Ukraine continues to be a major concern for businesses and investors, with the conflict entering its 975th day and Russian forces suffering record casualty rates. North Korean troops are moving towards the frontline, posing a significant threat to Ukraine's defence. Vladimir Putin is pulling Kim Jong Un deeper into the war, revealing a weakness in the Kremlin's ability to recruit troops at home. North Korea's infusion of fresh soldiers will remain practically risk-free for Pyongyang, unless the United States returns to its aggressive sanctions posture against the Kim regime. Russia is no stranger to employing foreign armies, with Cossack warriors famously fighting for the tsars in centuries past and the Red Army bolstering its ranks with Mongolian troops when it invaded China at the end of World War II. Today, the "TikTok soldiers" of Chechen warlord Ramzan Kadyrov are scattered across Ukraine's front lines.

After nearly three years of fighting, Putin is running low on cannon fodder. The Kremlin is finding it difficult and expensive to entice more of Russia's poor and desperate to sign up for the war, even with promises of bonuses and good pay. In theory, Moscow could force millions of its fighting-age men into the Ukrainian meat grinder through conscription, but this option is politically perilous. The Putin regime discovered the dangers of the draft when it briefly attempted a "partial mobilization" in September 2022, with Russians responding with howls of opposition. The government quickly backed off of the effort, informing many that their call-up orders were issued by "mistake". Since then, Russia has relied on mercenary groups and lucrative payouts to make the "golden handshake" in exchange for military service in Ukraine. Even these enticements are proving to be insufficient for the Kremlin's manpower needs.

By providing fresh troops to Russia, North Korea will likely help to backfill some, but not all, of Moscow's gaps. US Defense Secretary Lloyd Austin warned the news is a "very, very serious issue", but cautioned that the precise contribution of Pyongyang's troops remained unknown. For the Kim regime, support for Russia has many strategic benefits and few risks. First, protection from United Nations sanctions. Russia has used its Security Council veto to repeatedly shield North Korea from international monitoring and penalties for its prohibited missile tests and nuclear weapons development. Second, a security guarantee from the world's largest nuclear power. This summer, Moscow and Pyongyang agreed to a NATO-style mutual defense pledge, promising to aid each other in the event of war. Third, North Korea's troops will gain valuable combat experience if they survive. Finally, and perhaps most importantly, the Kim regime will likely benefit from Russian technology transfers that could greatly accelerate its missile and nuclear programs.

In exchange, the costs to North Korea are a pittance. An expeditionary force of roughly 12,000 soldiers is small potatoes compared to Kim's million-man army. His related shipments of around three million artillery shells to Russia is also a small fraction of his total stockpile. The danger to Ukraine is great, however, with a senior Ukrainian official stating that the addition of North Korean artillery on the battlefield has been "much worse than the Shaheds", the Iranian-designed kamikaze drones that Russia is using to pound Kyiv's troops and infrastructure.

Elon Musk's Alleged Ties with Vladimir Putin

Elon Musk is accused of having close ties with Vladimir Putin, withholding Starlink access from Taiwan as a favour to China. The Wall Street Journal reported that Putin asked Musk to withhold Starlink from Taiwan as a favour to China's Xi Jinping, with unnamed officials stating that Musk has been in regular contact with Putin since 2022. The Journal reported that in late 2023, Musk received his first request from the Kremlin to refrain from activating Starlink over Taiwan, citing a former Russian intelligence officer. The request was made for Beijing's sake, as Moscow increasingly relied on trade from China. Based on The Journal's findings, it's unclear exactly how many times Putin or his administration asked Musk for the favour.

The Chinese embassy in Washington told The Journal that it was not aware of the specifics of this arrangement, and did not respond to a separate request for comment sent outside regular business hours by Business Insider. Taiwan does not have official Starlink access because its laws require satellite services to be provided through a joint venture with a local operator that maintains majority ownership. The New York Times reported that SpaceX was unwilling to accept such an arrangement, and the self-governed island is thus creating its own low-earth orbit satellite network. Musk's reported conversations with Putin coincide with his apparent shift in rhetoric toward Ukraine in late 2022. Until that point, the billionaire had vocally supported Kyiv, providing it with 15,000 Starlink terminals.

In October of that year, he began seeking funding from the Pentagon to continue the free services, tweeting that they were taking a financial toll. Musk also tweeted a poll that month about a peace plan reflecting some of Russia's war demands at the time, including Russia's formal obtaining of Crimea and a guarantee of Ukraine's neutrality. The billionaire's post drew the fury of pro-Ukrainian accounts, but he added that he only suggested those measures to avoid further death in Ukraine and the risk of nuclear war. "Obviously, we are pro-Ukraine", he tweeted, saying that SpaceX had spent about $80 million on free Starlink for Ukraine. Two weeks later, Ian Bremmer, a political scientist who founded Eurasia Group, wrote in an email to his subscribers that Musk had spoken with Putin before tweeting this controversial peace plan. Per Bremmer, Putin had told Musk that if he could not accomplish his goals in Ukraine, he would turn to "major escalation". Musk and the Kremlin said Bremmer's report was untrue.

The allegations present awkward implications for the US, with Musk's SpaceX holding defense and space contracts with the Pentagon and NASA. An analysis published on Monday by The New York Times reported that the company has $3.6 billion in contracts with the Defense Department — primarily for launching American satellites into orbit — and $11.8 billion with NASA. Russian forces were reported to be buying up Starlink terminals earlier this year to help their invasion of Ukraine. The system has been vital to Ukrainian forces over the two-year conflict. But Russian agents are reportedly now using 'intermediaries' in Dubai in order to get their hands on the terminals, circumventing western sanctions imposed on Russia. House Democrats warned that Russia's use of the system in Ukraine could raise national security concerns in March. In a letter to SpaceX, two Democrats on the House Oversight Committee demanded information about Russia's potential illegal acquisition of the satellite-enabled terminals, according to the Washington Post. The letter cited recent allegations from Ukrainian intelligence officials, who say that Russian troops are using Starlink terminals to coordinate war efforts in eastern Ukraine, in potential violation of US sanctions.

As founder of SpaceX, Musk has cultivated close ties with US military and intelligence, with access to sensitive information. The company is the primary rocket launcher for both NASA and the Pentagon. Starlink has said it does not do any business in or with Russia, and Musk has branded claims of association with Putin "absurd". Dmitry Peskov, spokesperson for the Kremlin, insisted neither Putin nor the Kremlin were in regular contact with Musk. Musk has not yet commented on the claims published in the WSJ. The Kremlin today slammed the claims in the WSJ report as "not true" and "absolutely false". While Beijing remains officially neutral on the conflict between Russia and Ukraine, it has supported Putin's claims that the war was provoked by western aggression. The US this month imposed its first sanctions on Chinese firms for making weapons for Russia, accusing them of collaborating with Russian defence firms to produce drones vital to the war effort.

US Treasury Secretary Janet Yellen Announces New Sanctions

US Treasury Secretary Janet Yellen announced new sanctions targeting secondary entities in countries supplying Russia with critical items for its military. Yellen told world financial leaders gathered in Washington for annual meetings of the International Monetary Fund (IMF) and World Bank that "We will unveil strong new sanctions targeting those facilitating the Kremlin's war machine, including intermediaries in third countries that are supplying Russia with critical inputs for its military". The IMF and World Bank meetings mark the last major international finance gathering to be held during President Joe Biden's administration and come as the state of the economy and inflation are top concerns for American voters. The presidential election between the Republican party nominee, former President Donald Trump, and Democratic party nominee Vice President Kamala Harris is slated to be decided on November 5, with the outcome expected to have an enormous impact on global finance and the world's economy.

Yellen touched on the use of the proceeds from frozen Russian sovereign assets to provide loans for Ukraine. As she spoke, the European Parliament approved a loan of up to 35 billion euros ($38 billion) for Ukraine's defense and reconstruction that will be repaid using future revenues from Russian central bank assets frozen abroad. Yellen referred to the overall $50 billion loan package being negotiated by the Group of Seven and EU allies, saying the United States expects to be able to contribute $20 billion. The U.S. Treasury Department is "working tirelessly to unlock the economic value of frozen Russian sovereign assets to aid Ukraine", Yellen said. Earlier on October 22, Britain announced its readiness to provide Ukraine with a loan of<co: 2>Earlier on October 22, Britain announced its readiness to provide Ukraine with a loan of


Further Reading:

As North Korea, Iran and China support Russia’s war, is a ‘new axis’ emerging? - CNN

If South Korea decides to get involved in Ukraine, it has powerful options - Business Insider

Israel launches retaliatory strike on Iran - Financial Times

Lukashenko warns of war if Russia attempts to annex Belarus - RBC-Ukraine

MEPs Denounce Azerbaijan's Rights Violations Ahead Of Key Conference - Radio Free Europe / Radio Liberty

North Korea’s troops reveal Putin’s Ukraine pickle — no more cannon fodder - New York Post

Putin 'asked Elon Musk to switch off internet over Taiwan as a favour to China' - Daily Mail

Putin hosts growing BRICS alliance in Russia, touting it as an alternative to the West's "perverse methods" - CBS News

Putin once asked Elon Musk to not activate Starlink over Taiwan as a favor to Xi Jinping: report - Business Insider

Russo-Ukrainian War, day 975: Russian forces suffer record casualty rates as North Korean troops move towards the frontline - Euromaidan Press

Ukraine calls on North Korean soldiers to surrender and promises safety, food and medical care - Euronews

Vance says it is Ukraine's decision to end the war - NBC News

Vladimir Putin signals North Korean troops are in Russia - Financial Times

Themes around the World:

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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.

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Regulatory Reform and Industrial Competitiveness

German industry leaders urge accelerated regulatory reforms, including reduced bureaucracy and faster permitting for industrial projects. Structural changes are seen as essential to counteract stagnation, improve competitiveness, and ensure Germany remains a leading destination for global business operations.

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US Tariff Threats Disrupt Trade

President Trump’s threats of up to 25% tariffs on German and EU exports have destabilized markets and undermined Germany’s fragile economic recovery. These measures threaten over €250 billion in US-German trade, forcing companies to reassess supply chains, investments, and market strategies.

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Challenging Investment Climate and M&A

Brazil’s investment environment is marked by high interest rates, fiscal constraints, and political polarization. M&A activity remains subdued, but the Mercosur-EU agreement and foreign interest in mining, energy, and technology sectors could stimulate strategic investments and sectoral shifts.

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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.

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Long-term LNG security push

Utilities are locking in fuel amid rising power demand from data centers and AI. QatarEnergy signed a 27‑year deal to supply JERA about 3 mtpa from 2028; Mitsui is nearing an equity stake in North Field South (16 mtpa, ~$17.5bn). Destination clauses affect flexibility.

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Oil exports shift toward Asia

Discounted Iranian crude continues flowing via opaque logistics and intermediaries, with China and others adjusting procurement amid wider sanctions on other producers. For energy, shipping, and trading firms, this sustains volume but raises legal exposure, documentation risk, and payment complexity.

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Export Competitiveness Through Institutional Reform

Budget 2026 prioritizes regulatory streamlining, customs modernization, and logistics upgrades to boost export competitiveness. Institutional reforms now outweigh tariff cuts, lowering policy risk and enabling Indian exporters to navigate global supply chain disruptions more effectively.

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Geoeconomic Rivalry and Supply Chain Realignment

US-China strategic competition over technology, critical minerals, and industrial policy is driving global supply chain realignment. Companies are diversifying sourcing, investing in resilience, and reassessing exposure to geopolitical risks, with implications for cost structures and market access.

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Ethical and Legal Risks in Foreign Investment

International investment in Israeli government bonds faces mounting scrutiny due to human rights concerns and legal risks. Institutional investors are debating divestment, with ethical considerations increasingly influencing capital flows and reputational risk for global businesses.

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Labor Market Structural Transition

Taiwan’s labor market is undergoing structural change, driven by AI adoption, precision workforce planning, and geopolitical uncertainty. Companies face talent shortages in high-tech sectors and must adapt hiring strategies to remain competitive in a rapidly evolving environment.

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Digital Economy and Financial Innovation

Thailand is advancing digital finance, with the SEC set to regulate crypto ETFs and futures, and hosting the 2026 IMF–World Bank Meetings. These moves aim to position Thailand as a regional financial hub, attracting fintech investment but also requiring compliance with evolving regulations.

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Escalating Western Sanctions Enforcement

Western powers have intensified enforcement of sanctions on Russian oil exports, including direct maritime interdictions and seizures of shadow fleet tankers. This escalation increases legal, operational, and reputational risks for businesses involved in Russian energy logistics or trade, and heightens global supply chain volatility.

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Targeted Sectoral Trade Actions

Beyond country tariffs, the U.S. is signaling sector-focused measures (autos, steel/aluminum, aerospace certification disputes) that can abruptly disrupt specific industries. Companies should expect episodic shocks to cross-border flows, inventory strategy, and after-sales service for regulated products.

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State Intervention in Industrial Policy

Australia is shifting toward greater state intervention in strategic sectors, using price floors, tax incentives, and direct support for critical minerals. This marks a departure from market orthodoxy, aiming to crowd in private investment and manage economic risks tied to geopolitical competition.

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Persistent Logistics and Port Inefficiencies

Chronic inefficiencies at South African ports, especially Cape Town and Durban, continue to undermine export competitiveness. Recent failures cost the fruit sector hundreds of millions of rand, with global port rankings placing South African ports among the worst, hampering supply chains and growth.

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Robust Foreign Investment Inflows

Brazil attracted record foreign direct investment in 2025, totaling €71.9 billion (3.41% of GDP), driven by strong stock market performance and diversified investor interest. Sustained inflows reinforce Brazil’s position as a key emerging market destination for global capital.

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Regulatory and Tariff Uncertainty

US tariff policy remains unpredictable, with threats of 100% tariffs if production is not relocated. While Taiwan secured favorable terms for now, ongoing trade negotiations and political shifts in the US could alter the business environment for Taiwanese exports.

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EV and Battery Ecosystem Expansion

Indonesia is rapidly developing an integrated EV and battery ecosystem, attracting major foreign investment. Over $7 billion is being invested in battery supply chains, with EV-related investment reaching 15.5% of total FDI, positioning Indonesia as a regional hub.

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Post-Brexit Trade Policy Evolution

The UK's trade policy continues to evolve post-Brexit, with new trade agreements and ongoing negotiations with the EU and other partners. Shifting tariffs, regulatory divergence, and customs changes are impacting international trade flows and business planning.

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Regulatory Uncertainty and Standards Divergence

Diverging regulatory regimes between the UK, EU, US, and China complicate compliance for international businesses. Ongoing disputes over digital services, food standards, and AI governance increase operational complexity and may fragment market access for UK-based firms.

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Second-Life Battery Market Growth

The French market for second-life EV batteries is expanding rapidly, fueled by rising used EV sales and demand for energy storage. Batteries are increasingly reused for grid storage and renewables, extending asset life and opening new revenue streams for investors and operators.

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Tariff volatility and litigation

Aggressive, frequently revised tariffs—often justified under emergency authorities—are raising input costs and retail prices while chilling capex. Ongoing court challenges, including a pending Supreme Court ruling, create material uncertainty for exporters, importers, and contract pricing through 2026.

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Labor Market Saudization Intensifies

The government has raised Saudization rates to 60% in key private sector roles, including marketing and sales, and restricted senior positions to nationals. These measures impact expatriate hiring, increase compliance costs, and require strategic workforce adjustments for international businesses.

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US-UK Tariff Tensions Escalate

President Trump’s imposition of 10–25% tariffs on UK exports over the Greenland dispute threatens to cost UK businesses £6–15bn and risks recession. The uncertainty disrupts trade, supply chains, and investment planning, with sectors like manufacturing and chemicals most exposed.

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US–Taiwan Strategic Trade Pact

The new US–Taiwan trade agreement lowers tariffs on Taiwanese exports to 15%, secures preferential treatment for key sectors, and cements Taiwan’s role as a strategic US partner. This enhances market access but may provoke Chinese retaliation and regulatory uncertainty.

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US-Canada Trade Tensions Escalate

President Trump’s threats of 100% tariffs on Canadian exports, triggered by Canada’s partial trade agreement with China, mark a dramatic shift in North American trade relations. These tensions inject volatility into cross-border supply chains, investment planning, and the upcoming CUSMA review.

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Currency Volatility and Capital Outflow Risks

The Korean won’s depreciation to levels not seen since the 2008 crisis, combined with a $350 billion US investment commitment, heightens capital outflow risks. These currency pressures complicate cross-border investments, impact foreign exchange costs, and add uncertainty to multinational business planning.

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Capacity constraints and productivity ceiling

Business surveys show utilisation still elevated (around 83%+), signalling tight capacity and lingering cost pressures. Without productivity gains, growth can translate into inflation and wage pressures, affecting project timelines, construction costs, and the reliability of domestic suppliers for global value chains.

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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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Gaza Conflict Drives Regional Instability

The ongoing conflict in Gaza and Israel’s military operations have resulted in persistent regional instability, affecting supply chains, humanitarian access, and investor sentiment. Ceasefire agreements remain fragile, and reconstruction is tied to complex security and governance conditions, impacting trade and operations.

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Federal Reserve Policy and Political Pressures

The Federal Reserve has paused rate cuts, holding at 3.5-3.75%, amid robust GDP growth and persistent inflation. Political interference, including Supreme Court cases and leadership uncertainty, threatens Fed independence, influencing monetary policy outlook and global investor confidence.

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Offshore Wind Expansion and Grid Challenges

Germany leads Europe’s offshore wind push, targeting €1 trillion investment and enhanced energy security. However, regulatory delays, auction cancellations, and underdeveloped grid infrastructure threaten project viability, investor confidence, and the pace of decarbonization, with direct implications for energy-intensive industries.

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Investment Climate Amid Geopolitical Tensions

Geopolitical instability, including US-EU disputes and global conflicts, has led to increased market volatility and cautious investment. French markets have seen declines, and sectors like tech and industry face job cuts, prompting investors to adopt more defensive and selective strategies.

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Inflation, Consumer Spending, and Market Sentiment

Tariffs and policy uncertainty have contributed to persistent inflation above the Fed’s target, uneven consumer spending, and heightened market volatility. Wealthier groups continue robust spending, but broader sentiment remains cautious, influencing retail and investment strategies.

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Afreximbank and Regional Integration

South Africa’s accession to Afreximbank unlocks up to $11 billion in funding for infrastructure, energy, and industrialization. This supports value-added manufacturing, Black business participation, and deeper integration into the African Continental Free Trade Area, enhancing regional trade prospects.