Mission Grey Daily Brief - November 06, 2024
Summary of the Global Situation for Businesses and Investors
The 2024 US presidential election has resulted in a victory for Donald Trump, with the Republican Party also taking control of the Senate. This outcome is expected to have a significant impact on the global economy, with stocks rising and the US dollar surging in anticipation of potential tax cuts, tariffs, and rising inflation. Meanwhile, Tropical Storm Rafael is approaching the Cayman Islands and Cuba, potentially causing significant damage. In other news, the US has written off over $1 billion of Somalia's debt, and the Iraqi government has approved compensation plans for oil produced in the Kurdistan Region, potentially easing a long-running oil dispute. Lastly, Mexico's National Guard has killed two Colombians and wounded four on a migrant smuggling route near the US border, highlighting the ongoing challenges of migration and border security.
The US Election and its Impact on the Global Economy
The 2024 US presidential election has resulted in a victory for Donald Trump, with the Republican Party also taking control of the Senate. This outcome is expected to have a significant impact on the global economy, with stocks rising and the US dollar surging in anticipation of potential tax cuts, tariffs, and rising inflation. Bitcoin has also reached a record high, as traders bet on potential tax cuts, tariffs, and rising inflation under Trump. Experts predict a turbulent day for financial markets as a response to global uncertainty and Trump's potential plans for the economy. Trump's global trade policies, particularly his pledge to dramatically increase trade tariffs, especially on China, are causing particular concern in Asia. His more isolationist stance on foreign policy also raises questions about his willingness to defend Taiwan against potential aggression from China.
Tropical Storm Rafael and its Impact on the Caribbean
Tropical Storm Rafael is approaching the Cayman Islands and Cuba, potentially causing significant damage. The Toronto Star reports that the storm is spinning towards the Cayman Islands and Cuba is preparing for a hurricane hit. The Northeast Mississippi Daily Journal adds that the storm has passed Jamaica and is heading towards Cuba, with the potential for significant damage. This event highlights the vulnerability of the Caribbean region to tropical storms and hurricanes, and the potential for significant economic and humanitarian impacts.
North Korea's Nuclear Ambitions and its Impact on Global Security
North Korea has told the UN that it is speeding up its nuclear weapons development, with the launch of a new ICBM and the deployment of troops to support Russia in Ukraine. This development has raised concerns among the international community, with the US accusing Russia and China of protecting North Korea and criticizing their failure to prevent North Korea's nuclear ambitions. The UN Security Council has met to discuss North Korea's nuclear program, but North Korea has doubled down on its plans, refusing to engage in nonproliferation efforts. This situation highlights the growing tensions between North Korea and the international community, and the potential for further escalation and instability in the region.
The Ukraine War and its Impact on Global Geopolitics
The Ukraine war continues to be a major geopolitical issue, with Russia engaging in a war of attrition and analysts suggesting that Putin is not in a hurry to end the conflict, regardless of the outcome of the US election. Russia has been ratcheting up pressure on Ukraine, with larger troop numbers and artillery supplies, and making incremental but important gains on the front lines. North Korean troops fighting for Russia have come under Ukrainian fire, adding to Ukraine's worsening situation on the battlefield. Russian advances have accelerated, with battlefield gains of up to 9 kilometers in some parts of Donetsk. This situation highlights the ongoing challenges for Ukraine and its allies, and the potential for further escalation and instability in the region.
Further Reading:
BREAKING: Trump wins US 2024 presidential election, foreign leaders congratulate - Kyiv Independent
Iraqi government approves compensation plans for oil produced in Kurdistan Region - The National
North Korean troops fighting with Russia are hit by Ukraine shells, official says - The Independent
Putin is in no hurry to end the Ukraine war, no matter who wins the US election - Business Insider
Stocks rise as investors await US presidential result - BBC.com
Storm in the Caribbean is on a track to likely hit Cuba as a hurricane - Toronto Star
Themes around the World:
Persistent Tariff Policy Uncertainty
Washington’s tariff regime remains volatile but structurally entrenched, with effective rates around 11.8%, fresh Section 301 actions possible by July, and executives expecting durability. For exporters, importers, and investors, policy unpredictability is now a core operating cost affecting pricing, sourcing, and capital allocation.
US Tensions Threaten Market Access
Relations with Washington have deteriorated, with reports of a 30% US tariff on South African goods and continued scrutiny of AGOA preferences. For exporters in agriculture, autos, and manufacturing, the risk is reduced market access and greater policy uncertainty.
Tariff Regime Volatility Deepens
Washington is rebuilding tariffs after the Supreme Court voided earlier duties, using Section 301 and expanded Section 232 metals tariffs up to 50%. The shift raises landed costs, complicates pricing, and heightens legal and compliance uncertainty for importers and manufacturers.
Data Centre and AI Infrastructure Boom
Large-scale digital infrastructure is emerging as a new investment theme, led by Bell Canada’s planned 300-megawatt Saskatchewan AI data centre with a reported $12 billion commitment. These projects will boost demand for power, land, cooling infrastructure, and local regulatory compliance.
B50 Biofuel Reshapes Trade
Indonesia plans nationwide B50 biodiesel implementation from 1 July 2026, diverting about 5.3 million tons of CPO and aiming to eliminate roughly 5 million tons of diesel imports. The policy may tighten palm-oil export availability, alter energy trade flows, and affect food-versus-fuel pricing.
US-Bound Investment Reallocation Intensifies
Taiwanese firms are accelerating investment into the United States under bilateral trade arrangements, with reported commitments of $250 billion and TSMC alone investing $165 billion in Arizona. This supports market access, but may redirect capital, talent, and supplier ecosystems away from Taiwan-based operations.
Middle East Energy Shock
Conflict-linked disruption around Hormuz is raising oil and LNG costs for an economy importing over 80% of its energy. OECD cut Korea’s 2026 growth forecast to 1.7% from 2.1%, while refiners, petrochemicals, steel and transport face higher operating costs.
Energy Import Shock Exposure
Japan’s heavy dependence on imported fuel remains a first-order business risk. Roughly 95% of crude imports come from West Asia, while LNG prices in Asia have reportedly surged 70%, raising power costs, compressing margins, and threatening manufacturing continuity.
Corporate Governance Reform Deepens
Revisions to Japan’s Corporate Governance Code are expected to push companies to deploy cash more efficiently, improve board oversight, and strengthen accountability. This should support M&A, capex, and shareholder returns, while raising scrutiny on governance quality and underperforming assets.
Electricity Costs Still Elevated
Although supply has stabilised, tariff affordability is now a central business risk. Government aims to keep future increases in single digits, but electricity prices still pressure manufacturers, miners, and consumers, constraining margins, domestic demand, and competitiveness in energy-intensive export sectors.
Policy Volatility and Credibility Risk
Frequent shifts across tariffs, blacklists, export controls, and China policy are creating a broader U.S. policy-volatility premium. For international business, this raises scenario-planning needs, slows capital allocation, complicates partner decisions, and increases the value of supply-chain and geopolitical diversification.
Foreign Investor Tax Treaty Uncertainty
Recent legal scrutiny of Mauritius tax-treaty benefits, including after the Tiger Global ruling, has unsettled cross-border investors despite government reassurances. Questions around GAAR, tax residency certificates and indirect transfers could affect holding structures, exits, withholding taxes and broader confidence in India-linked investment vehicles.
Energy Security and Oil Sourcing
India’s March crude imports fell 13% to 4.5 million barrels per day as Hormuz disruption hit Gulf supply, while Russian volumes nearly doubled to 2.25 million bpd. Businesses face higher freight, sanctions-compliance and energy-price risks despite temporary U.S. waivers supporting Russian cargoes.
Export Reliance, External Exposure
Manufacturing resilience is increasingly tied to external demand rather than domestic recovery. Export-oriented firms are outperforming, but this leaves China highly exposed to tariffs, trade probes, shipping disruptions, and geopolitical shocks, increasing volatility for exporters, logistics operators, and global procurement planning.
Treasury Market and Fiscal Strain
The IMF warns persistent US deficits near 6% of GDP are eroding Treasuries’ safety premium and pushing borrowing costs higher globally. Rising sovereign yields tighten financial conditions, affect valuation models, and raise funding costs for cross-border investors and capital-intensive businesses.
Border Bottlenecks Raise Costs
Land trade with the EU still faces costly friction at border crossings. Nearly half of surveyed firms cite queues as the top customs problem, average clearance time rose to 6.9 hours, infrastructure constraints remain acute, and repairs at key Poland crossings risk adding further delays.
Semiconductor Controls Intensify Further
The United States is tightening chip restrictions through Commerce actions and the proposed MATCH Act, targeting Hua Hong, SMIC, YMTC and CXMT. Equipment suppliers with roughly 30%-35% China exposure face revenue losses, while electronics supply chains confront deeper technological bifurcation.
Regional Security Volatility Persists
Fragile ceasefires around Gaza, Lebanon and Iran remain unresolved, with recurring strikes and stalled negotiations raising the risk of renewed escalation. For businesses, this sustains elevated security, insurance and contingency-planning costs across trade, travel, logistics and fixed-asset investment decisions.
Trade Remedies Pressure Building
Vietnamese exporters face rising trade-defense actions, especially in steel. Mexico imposed anti-dumping tariffs on hot-rolled steel and tightened origin controls, showing how technical standards, traceability, and compliance requirements are becoming decisive for maintaining access to overseas markets.
Defence Industrial Expansion Drive
Canada’s push to build domestic defence capacity is attracting new manufacturing investment as Ottawa plans major procurement expansion over the next decade. Proposed projects in Ontario signal opportunities for foreign investors, but success depends on procurement speed, localization rules, and industrial policy clarity.
Tariff Circumvention Drives Enforcement
Roughly $300 billion of tariffed goods are estimated to reach the U.S. via Southeast Asia and Mexico, with suspicious transactions up 76% in early 2025. That is increasing customs scrutiny, origin-verification risk, and exposure to penalties for companies relying on transshipment or complex multi-country assembly structures.
Suez Corridor Security Shock
Red Sea and Bab el-Mandeb disruption remains Egypt’s biggest external business risk, slashing canal income by about $10 billion and cutting traffic sharply. Shipping diversions raise freight, insurance and inventory costs while weakening Egypt’s logistics revenues and FX inflows.
Water Infrastructure Failure Risk
Gauteng’s water crisis has become a systemic operational threat, marked by shortages, ageing infrastructure, contamination risks, and high losses. Non-revenue water reaches 49% in Johannesburg and 44% in Tshwane, creating production interruptions, higher contingency costs, and greater location risk for investors.
Tariff Regime Rebuild Uncertainty
Washington is rebuilding its tariff regime after the Supreme Court voided emergency tariffs that had generated $166 billion. New Section 301 actions could cover partners representing 70% of imports, raising landed costs, legal uncertainty, and pricing risk for importers.
Logistics networks need modernization
French freight transport remains heavily road-dependent, with road carrying about 85% of goods while inland waterways hold near 3% and fell 1.8% last year. Ongoing reforms and infrastructure gaps affect modal diversification, resilience, and supply-chain cost efficiency.
Freight and Logistics Cost Spike
War-related shipping and airfreight disruption pushed maritime and air rates up more than 40%, with SCFI rising 41.5% and US-bound air rates 47.8%. Exporters face longer routes, tighter capacity and margin pressure, prompting emergency logistics support for SMEs.
Export Resilience Under Cost Pressure
March exports rose 11.7% year on year, led by China demand and semiconductor-related shipments, but margins are tightening as firms absorb tariff and input-cost pressures. Strong headline trade masks emerging strain from higher commodity prices, weaker terms of trade, and supply disruptions.
Weak Growth and Policy Constraints
Thailand’s macro backdrop remains fragile, with 2026 GDP growth forecast around 1.2% to 1.6%, public debt near 66% of GDP, and limited fiscal room. Slower growth, softer external demand, and cautious capital markets may delay expansion decisions and increase financing and demand-side uncertainty.
Hormuz Maritime Security Shock
Disruption in the Strait of Hormuz remains the most immediate operational risk. The chokepoint normally carries about 20% of global oil and gas flows, but recent traffic reportedly fell from roughly 130 daily transits to single digits, driving freight, insurance and rerouting costs.
Inflation And Rates Stay High
Elevated inflation and delayed monetary easing are keeping financing expensive for businesses and consumers. Urban inflation rose to 15.2% in March from 13.4%, while analysts expect lending rates to remain around 20% near term, constraining credit, investment, and demand.
Electrification and Industrial Policy Push
France’s new electrification strategy aims to raise electricity’s share of final energy use from 27% to 38% by 2035. Expanded EV, heat pump, truck, and industrial support creates investment opportunities while accelerating supply-chain shifts away from fossil fuels.
War Damage to Logistics
Ukrainian long-range attacks on Tuapse, Primorsk, Ust-Luga and other export nodes are disrupting oil loading, refining and port throughput, with reported daily shipment losses near 880,000 barrels, creating mounting physical supply-chain disruption and insurance complications for counterparties.
Export Competitiveness Under Strain
Goods exports fell 14.4% year-on-year in March to $2.264 billion, while July–March exports declined 8% to $22.73 billion. High energy tariffs, expensive credit, delayed refunds and weak diversification are undermining textile-led export sectors central to trade and sourcing strategies.
Energy Import Cost Surge
Regional conflict has sharply raised Egypt’s gas and oil import bill, with monthly gas costs reportedly jumping by $1.1 billion to $1.65 billion. Higher fuel prices, energy rationing, and cost pass-through threaten manufacturers, logistics operators, and import-dependent sectors.
Fiscal tightening amid slower growth
France is freezing or cutting up to €6 billion in 2026 spending as growth was lowered to 0.9% and inflation raised to 1.9%. Higher debt-service costs and weaker revenues could restrain public procurement, subsidies, and domestic demand.
India Partnership Gains Momentum
South Korea and India aim to double bilateral trade to $50 billion by 2030, resume CEPA upgrade talks, and expand cooperation in semiconductors, shipbuilding, steel, batteries, and critical minerals, creating diversification opportunities for investment, sourcing, and market expansion.