Mission Grey Daily Brief - October 30, 2024
Summary of the Global Situation for Businesses and Investors
The world is currently facing a heightened risk of major power confrontation, with wars becoming increasingly difficult to end and regional powers forging their own alliances. The US presidential election is set to shape the global landscape, with Kamala Harris and Donald Trump vying for the White House. Russia's support for the Houthis has disrupted supply chains, while North Korea's troop deployment to Russia and Sudan's civil war escalate regional tensions. Algeria's grey-listing by the Financial Action Task Force (FATF) raises concerns about its financial system. China's crackdown on fake news about its military underscores the country's information control efforts.
Russia's Support for the Houthis Disrupts Supply Chains
Russia's assistance to the Iran-backed Houthi terrorist group has significantly impacted supply chains, with commercial shipping in the Red Sea down 90% from November 2023 to February 2024. Russian satellite data has enabled the Houthis to expand their strikes, disrupting trade routes. Russia's aim to destabilize the Middle East is part of a strategy to distract the US and fortify alliances with Iran and North Korea. The US has spent $1 billion on munitions to protect shipping in the Red Sea, highlighting the economic and security implications of this geopolitical conflict.
North Korea's Troop Deployment to Russia Escalates Regional Tensions
North Korea's dispatch of 10,000 troops to Russia is viewed as an escalation by Finland's president. This strengthens Russia's war effort and underscores Putin's efforts to forge alliances in the face of US-led sanctions. The widening conflict in the Middle East diverts US attention from Russia's war against Ukraine, allowing Russia to pursue its strategic objectives. The US has responded with military action to protect shipping in the Red Sea, demonstrating the escalating tensions in the region.
Sudan's Civil War Escalates, Fuelled by Outsiders
Sudan's civil war has intensified, with outsiders accused of fuelling the conflict. UN Secretary-General Antonio Guterres has expressed concern, calling for an end to the violence. The war has led to a humanitarian crisis, with thousands of civilians killed or injured and millions displaced. Regional tensions are exacerbated as Sudan's warring factions receive support from external powers. The conflict's escalation raises concerns about regional stability and the potential for further international involvement.
Algeria's Grey-Listing by FATF Raises Concerns About Financial System
Algeria's placement on the FATF grey list signals concerns about its financial system, particularly regarding money laundering and terrorist financing. The strong influence of the military and lack of transparency in transactions, especially those involving state-owned enterprises or military contracts, facilitate illicit activities. Algeria's failure to implement all recommended measures to strengthen its financial system and comply with international standards raises economic and governance concerns. Financial institutions in Algeria need to enhance internal control systems to detect and report suspicious transactions.
Further Reading:
Finland’s president calls North Korea’s dispatch of troops to Russia an escalation - Toronto Star
How this US election could change state of the world - BBC.com
Russia Helps Houthis Disrupt Supply Chains - NAM
The Ongoing Catastrophe of Sudan's Civil War - The Nation
The Ongoing Catastrophe of Sudan’s Civil War - The Nation
The military’s grip on power behind FATF decision to pout Algeria on grey list - Medafrica Times
Themes around the World:
Labor Market Reforms and Foreign Workforce Growth
Japan’s record 2.57 million foreign workers reflect acute labor shortages, prompting ongoing immigration reforms. Sectors like manufacturing, retail, and healthcare are most affected, influencing workforce planning, operational costs, and the competitive landscape for multinationals.
Technology Export Controls and Decoupling
The US maintains and expands technology export controls, particularly targeting China and sensitive sectors like semiconductors and AI. These measures drive supply chain decoupling, compliance complexity, and strategic realignment for technology firms and global investors.
Canada-China Strategic Trade Pivot
Canada’s new agreement with China lowers tariffs on Chinese EVs and secures reduced Chinese tariffs on Canadian agriculture. This shift diversifies trade but risks US retaliation, reshapes supply chains, and could attract Chinese investment in Canadian manufacturing and energy sectors.
Critical Minerals and Mining Ambitions
With $2.5 trillion in mineral reserves, Saudi Arabia is investing $110 billion to become a regional mining and processing hub. Strategic partnerships, especially with the US, aim to reduce supply chain dependence on China and position the Kingdom as a key player in global mineral supply chains.
Economic Policy Uncertainty Amid Inflation
Rising living costs and a weak yen have made inflation a top public concern. Competing fiscal proposals—including temporary food tax cuts and expanded stimulus—are fueling bond market volatility and raising questions about Japan’s long-term fiscal sustainability.
Geopolitical Tensions and Security Risks
Ongoing cross-strait tensions with China, including military posturing and economic coercion, create persistent risks for business continuity, supply chain stability, and foreign investment in Taiwan. The region remains a flashpoint with global ramifications for trade and security.
Green Energy and Climate Leadership
India is targeting 5 million metric tons of green hydrogen annually by 2030 and has achieved 266 GW of renewable capacity. Aggressive policies and incentives are attracting global capital, making India a hub for green energy manufacturing and a leader in the global energy transition.
Energy Transition Investment Challenges
Canada’s energy transition investment fell 8.8% to $33.4 billion, losing its top 10 global ranking. Policy uncertainty and declining EV spending threaten competitiveness. Integrated strategies for renewables, grids, and electrified transport are critical for future growth and investor confidence.
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.
Security Tensions and Border Volatility
Rising US pressure for joint military operations against Mexican cartels, coupled with threats of unilateral action, heightens border volatility. While Mexico rejects intervention, persistent security concerns could disrupt cross-border logistics, investment confidence, and supply chain continuity.
Renewable Energy Transition Partnerships
Indonesia is accelerating its energy transition through partnerships with global firms, notably China’s GCL, to develop renewable and waste-to-energy projects. These initiatives support emissions reduction targets and open new opportunities for clean energy investment.
Electric Vehicle Market Disruption
Reduced tariffs allow up to 49,000 Chinese EVs annually into Canada at 6.1%, boosting affordable options and competition. This move could reshape the auto sector, attract Chinese investment, and challenge domestic manufacturers, while provoking US concerns over supply chain security and market share.
Infrastructure Investment Spurs Opportunities
Major federal investments under the Infrastructure Investment and Jobs Act are modernizing US transportation, energy, and digital networks. These initiatives create significant opportunities for construction, technology, and green energy sectors, while also improving long-term supply chain efficiency.
Market Consolidation and Developer Shakeout
Regulatory complexity and higher entry barriers from the Shelter Act are expected to drive consolidation in Poland’s construction sector. Smaller firms may exit or be acquired, favoring larger, capitalized players and international investors seeking stable partners for large-scale shelter projects.
US Tariffs Threaten Finnish Exports
The US announced 10% tariffs on Finnish goods, rising to 25% by June 2026 if the Greenland dispute persists. This escalation directly threatens Finnish exports, disrupts supply chains, and injects significant uncertainty into transatlantic trade relations.
Activation of EU Anti-Coercion Instrument
France is leading calls to activate the EU’s anti-coercion instrument in response to US economic pressure. This unprecedented move could trigger retaliatory trade measures, restrict US firms’ access to EU markets, and reshape the legal and operational environment for international businesses.
Suez Canal Security and Trade Disruptions
Despite partial recovery, Red Sea and Suez Canal traffic remains volatile due to ongoing regional security threats, especially Houthi attacks. This unpredictability disrupts global supply chains, increases insurance costs, and threatens Egypt’s vital foreign currency revenues.
Escalating Australia-China Trade Tensions
Recent moves by Australia to impose tariffs and quotas on Chinese steel, and disputes over the Port of Darwin, have reignited trade tensions. These developments risk retaliatory Chinese actions, impacting Australia’s exports, investment flows, and overall business climate.
Labor Reform and Wage Increases
Mexico’s 2026 labor reforms include a 13% minimum wage hike, stricter workplace inspections, and a planned reduction of the workweek to 40 hours. These changes improve worker protections but increase compliance costs and operational complexity, especially for export-oriented manufacturers.
US Technology Controls and Export Policy
The US has tightened export controls on advanced technology, especially AI chips, while selectively easing restrictions for vetted commercial sales to China with tariffs. These evolving rules are reshaping global semiconductor supply chains, impacting tech sector competitiveness, and influencing strategic investment decisions in tech manufacturing.
Accelerating Supply Chain Diversification
Vietnam is rapidly emerging as a preferred hub for high-value electronics manufacturing, with global firms like Google and Apple relocating advanced production and engineering processes from China. This shift is driven by geopolitical tensions, U.S. tariffs, and the need for resilient, independent supply chains, positioning Vietnam at the center of global value chains.
Agricultural Export Resilience and Vulnerability
Despite war, Ukraine’s maritime corridor has shipped 100 million tons of grain since 2023, but attacks on ports have slashed agricultural exports by 47% year-on-year. This volatility threatens global food security and the stability of agri-business supply chains.
Diversification of Trade Partnerships
With strained US and EU relations, South Africa is strengthening ties with the UAE, China, and other Asian markets. This diversification supports investment in renewable energy, AI, and manufacturing, but also exposes the country to new geopolitical and compliance risks.
Supply Chain Resilience and Diversification
The US-Taiwan deal includes mechanisms for ongoing consultation on tariff and supply chain issues, supporting resilience against shocks. Taiwan’s strategy emphasizes global diversification, advanced packaging, and maintaining technological leadership amid rising global competition.
Currency Watchlist and Baht Volatility
The US Treasury has placed Thailand on its currency monitoring list due to trade and current account surpluses. The Bank of Thailand is tightening gold trading rules to curb speculative capital flows, which may impact exchange rates, compliance costs, and cross-border financial operations.
US Foreign Investment Scrutiny Rises
Foreign investment in the US faces heightened scrutiny, particularly in strategic sectors and from Chinese investors. Regulatory barriers and national security reviews are increasingly shaping cross-border M&A, technology transfers, and capital flows.
Energy Cooperation and Gas Exports Advance
Israel is deepening energy partnerships, notably with Cyprus, to jointly develop offshore gas fields. These projects are central to regional energy strategies and offer significant opportunities for international investment, but remain sensitive to geopolitical shifts and security risks.
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.
Surge in Used EV Market Drives Battery Reuse
France’s used electric vehicle market grew 30% in 2025, with battery longevity and second-life applications now critical. This trend boosts demand for battery reuse solutions, influencing investment strategies and the structure of aftersales and recycling supply chains.
Saudi Aramco’s Global Investment Drive
Aramco continues to secure international partnerships and invest in energy diversification, influencing global supply chains and capital flows. Its strategic moves, including stake acquisitions and cross-border ventures, impact energy markets and related industries worldwide.
Export Diversification Amid Tariffs
China’s exports to the US fell by nearly 20% in 2025 due to tariffs, but overall exports grew 3.2% as China rapidly diversified to Southeast Asia, Africa, and Latin America. This shift is reshaping global supply chains and trade flows, challenging US trade leverage.
Supply Chain Risks and Opportunities in Battery Reuse
The shift to a circular battery economy introduces new risks—such as validation, logistics, and regulatory compliance—but also rewards. Companies that master traceability, recycling, and second-life applications can secure supply, reduce costs, and enhance ESG performance.
Energy Dependency and Strategic Vulnerability
Germany’s reliance on imported energy, particularly US LNG after the Russian phase-out, exposes its economy to price shocks and political leverage. This dependency increases operational risks for manufacturers and raises costs, impacting competitiveness and long-term investment planning.
Labor Market and Workforce Realignment
Global tech and financial firms are shifting jobs to India amid US layoffs and AI adoption. Over 50% of surveyed companies plan to expand hiring in India in 2026, reflecting India’s growing role as a global talent hub and the impact of labor market reforms and skilling initiatives.
Security Guarantees as Investment Prerequisite
International investors and financial institutions stress that credible security guarantees are essential for large-scale investment in Ukraine. Ongoing conflict and uncertainty over territorial concessions remain major obstacles, with capital inflows contingent on a stable, enforceable peace framework.
Surge in Foreign Investment in Germany
Foreign direct investment in Germany more than doubled to €96 billion in 2025, surpassing German outbound investment for the first time since 2003. Political stability, EU market access, and legal certainty make Germany increasingly attractive for international investors, supporting growth and supply chain resilience.