Mission Grey Daily Brief - November 10, 2024
Summary of the Global Situation for Businesses and Investors
The world is bracing for another series of shocks as Donald Trump is set to assume office in January following his election victory. Trump's return to power has heartened some of America's long-time rivals, particularly Moscow, while worrying many of its friends. Instead of seeing peace on the horizon, a world already in turmoil is preparing for another series of shocks. Trump's proposed economic policies, including a 60% tariff on Chinese imports and a 10% tariff on all U.S. imports, are expected to have broad economic implications for China and Taiwan, respectively. Trump's win has also boosted the chances of Netanyahu remaining in power until Israel's 2026 elections. In Ukraine, there are fears that Trump plans to force a peace deal on Kyiv by cutting off the flow of U.S. military aid. Trump's victory has also sparked uncertainty over how long Western support for Ukraine will continue, with Hungary's leader predicting that a new U.S. administration under Trump will cease providing support to Ukraine.
Trump's Tariff Bombshell: Implications for China and Taiwan
U.S. President-elect Donald Trump's proposed economic policies include a 60% tariff on Chinese imports and a 10% tariff on all U.S. imports. These policies are expected to have broad economic implications for China and Taiwan, respectively. Taiwan's Economics Minister Kuo Jyh-huei has outlined plans to help companies shift production and minimize the impact on Taiwan's critical tech and electronics sectors. Taiwan's government is preparing policies to support companies looking to diversify their supply chains and adapt to shifting trade policies. Taiwan, whose firms have invested heavily in China over the past four decades, is closely watching how these tariffs could affect Taiwanese companies that have historically relied on China's lower production costs.
Japan's Military Buildup and Alliance with the U.S.
Japan's Prime Minister Shigeru Ishiba has renewed a pledge to build up Japan's military and deepen its alliance with the U.S. under President-elect Donald Trump. Ishiba cited escalating tensions with China, Russia, and North Korea as reasons for strengthening Japan's military power. He also pledged to pursue the ongoing military buildup plan under the 2022 security strategy, which calls for a counter-strike capability with long-range cruise missiles, a break from Japan's self-defence only principle. Ishiba's governing coalition, however, lost a recent parliamentary election, which could make it difficult to pursue his party's planned policies and budget plans in the coming months.
Western Parts Found in Russian Weapons
Ukraine has found Western-made parts inside the wreckage of a new heavy Russian combat drone that crashed last month. Ukraine's military intelligence agency said that an analysis of the S-70 Okhotnik, or "Hunter," drone that was downed over eastern Ukraine in early October, revealed components made by companies in the U.S. and Europe. Officials found microelectronics and other technological components inside the wrecked drone made by U.S.-based companies Analog Devices, Texas Instruments, and Xilinx-AMD, as well as Infineon Technologies in Germany and STMicroelectronics in Switzerland. Ukraine uploaded purported evidence of the Western-made parts to a government portal, where several other companies were listed. Business Insider reached out to the companies mentioned in the HUR's statement and received a response from four of them. Infineon, ST, Texas Instruments, and Analog said that since the start of the Ukraine war in 2022, they have taken steps to prevent their technologies from falling into Russia's hands in violation of sanctions and export control measures. The recent find marks the latest discovery of Western-made components inside Russian weapons, despite widespread international sanctions aimed at curbing Moscow's war efforts.
Syrian Refugees Returning to Syria
Hundreds of thousands of Syrian refugees have returned to their country since Israel launched a massive aerial bombardment on wide swathes of Lebanon in September. Many who fled to Lebanon after the war in Syria started in 2011 did not want to go back. But for officials in Lebanon, the influx of returnees comes as a silver lining to the war between Israel and Hezbollah that has killed more than 3,000 people and displaced some 1.2 million in Lebanon. Some in Syria hope the returning refugees could lead to more international assistance and relief from western sanctions. Lebanon's caretaker Minister of Social Affairs Hector Hajjar told Russia's Sputnik News last month that the war in Lebanon could yield “a positive benefit, an opportunity to return a large number of displaced Syrians to their country, because the situation there is now better than here." Political leaders in Lebanon, which was hosting an estimated 1.5 million Syrian refugees before the recent wave of returns, have been calling for years for the displaced to go home, and many don't want the refugees to return.
Further Reading:
Newspaper headlines: US economy 'overheating' and 'Ukraine fears' - BBC.com
US to send contactors to Ukraine to repair, maintain US weapons - VOA Asia
Themes around the World:
Fragile Reindustrialization Strategy
France’s industrial revival is strategically important but uneven: since 2022 it reports a net 400 factory openings and 130,000 jobs, yet 2025 saw 124 threatened plants against 86 openings. Investors face opportunity in batteries, aerospace and defense, but traditional sectors remain vulnerable.
Energy Grid Expansion Reforms
South Africa’s improved power availability has reduced acute outages, but competitiveness now depends on transmission buildout, tariff reform and wholesale-market implementation. Government’s R6.1bn 2026/27 energy budget and plans for 14,000km of lines will shape industrial investment timing and costs.
Energy Shock and Inflation
Imported energy dependence is pushing inflation from 2.89% in April toward a possible 4-5%, raising fuel, power, freight and input costs. For investors and manufacturers, margin pressure, weaker demand and policy uncertainty are increasing across logistics, retail and industrial operations.
US Trade Talks Uncertainty
Canada’s commercial outlook is dominated by volatile U.S. trade negotiations ahead of the CUSMA review. Tariffs already affect steel, aluminum, autos, copper and lumber, while Washington’s tougher posture raises compliance, pricing and market-access risks for exporters and investors.
Policy Uncertainty Around B-BBEE
Black economic empowerment rules remain a major operating consideration, with active court challenges and debate over procurement changes. Proposed set-asides and ownership requirements may reshape supplier eligibility, raise compliance costs, and delay infrastructure or public-sector contracts in specialized sectors.
Industrial Policy and State Intervention
The planned nationalisation of British Steel highlights a more interventionist industrial strategy focused on strategic capacity, supply resilience and national security. This signals greater state involvement in manufacturing, possible local-content preferences, and a less predictable competitive landscape for investors.
Monetary Tightening and Inflation
The Bank of England held rates at 3.75%, but officials signaled possible hikes if energy-driven inflation persists. With CPI at 3.3% in March and forecasts near 4%, borrowing costs, capex planning, credit conditions and household demand remain vulnerable.
Sanctions enforcement and export controls
German authorities are tightening scrutiny of dual-use exports after uncovering a sanctions-evasion network that routed over 16,000 shipments worth more than €30 million to Russia. Firms face higher compliance burdens, distributor due diligence requirements and greater enforcement risk in cross-border trade.
Defense buildup boosts industry
France approved an extra €36 billion in military spending through 2030, taking the total to €436 billion and around 2.5% of GDP. The shift will expand opportunities in defense manufacturing, logistics, drones and dual-use technologies while redirecting public resources toward strategic sectors.
Election-Driven Policy Volatility
With Brazil nearing the presidential election, economic policy is becoming more tactical and less predictable. Frequent announcements on taxes, subsidies, and credit lines heighten regulatory volatility, complicating scenario planning, hedging decisions, and market-entry timing for foreign investors and multinational operators.
Labour Mobility and Skills Constraints
Negotiations over a capped UK-EU youth mobility scheme remain difficult, with Britain reportedly seeking fewer than 50,000 entrants. Continued frictions in migration and visa policy could sustain labour shortages in hospitality, construction, healthcare and creative industries, complicating staffing and expansion decisions.
Labor Rules Add Operating Uncertainty
New outsourcing regulation Permenaker 7/2026 has triggered labor protests and threats of rolling demonstrations nationwide. Unions argue the rule legalizes outsourcing, weakens legal certainty, and could raise corruption risks in local enforcement, creating additional compliance and workforce-management challenges for manufacturers and service firms.
Infrastructure Buildout Improves Logistics
Large transport and digital infrastructure spending is improving India’s operating environment. Rail capex reached about Rs 2,72,000 crore, the Dedicated Freight Corridor now handles around 480 trains daily, and new subsea cable and data-centre investments should enhance logistics and digital resilience.
Reputational And Compliance Exposure
International firms operating in or with Israel face heightened scrutiny over conflict exposure, humanitarian access, and counterparties linked to sanctioned, disputed, or politically sensitive activities. This raises due-diligence demands, insurance and legal costs, and the potential for stakeholder backlash across global markets.
Shadow Fleet Sustains Oil Exports
Despite tighter enforcement, Iran continues using ship-to-ship transfers, dark-fleet tankers, AIS manipulation and relabelling to move crude toward Asian buyers, especially China. This keeps legal, insurance, ESG and maritime safety risks elevated for refiners, traders, ports, and service providers.
Semiconductor Ecosystem Build-Out
India is accelerating semiconductor ambitions through partnerships such as Tata Electronics and ASML, linked to the Dholera fab and broader talent-development initiatives. This supports supply-chain diversification beyond East Asia, although execution, ecosystem depth and infrastructure readiness remain critical business variables.
Deforestation Compliance Becomes Gatekeeper
European deforestation rules are becoming a decisive market-access filter for Brazilian soy, beef, coffee and timber supply chains. Even with lower tariffs, exporters need geolocation, traceability and due-diligence systems or risk exclusion, delayed shipments, higher compliance costs and customer losses.
Internet Shutdowns Disrupt Commerce
Months-long internet shutdowns and digital restrictions are damaging online services, startups, payments and business communications. For international firms, this undermines operational visibility, partner coordination, digital marketing, remote service delivery and data reliability across procurement, sales and logistics activities.
Industrial Energy and Gas Shortages
Blockade pressure and damage affecting gas-related infrastructure increase the risk of rationing between power generation, industry, households, and exports. Energy-intensive sectors such as petrochemicals, metals, cement, and manufacturing face higher outage risk, lower utilization, and unreliable delivery schedules for regional customers.
Growth Slowdown, Weak Demand
Thailand’s 2026 growth outlook has softened to around 1.5-2.1%, with first-quarter GDP seen at just 2.2% year on year and 0.1% quarter on quarter. High household debt, subdued credit and falling confidence are constraining domestic sales, hiring and expansion plans.
Regulatory Arbitrage and Local Fiscal Stress
Beijing’s campaign against abusive local enforcement, including cuts to 300,000 grassroots personnel, reflects mounting fiscal strain in local governments. While intended to reduce arbitrary inspections and fines, uneven enforcement and revenue pressures still create compliance unpredictability for firms operating across provinces.
Energy transition faces bottlenecks
Brazil’s renewables and storage opportunity is significant, but grid and regulatory bottlenecks are costly. Around 20% of available solar and wind output is reportedly curtailed, while the planned 2 GW battery auction could unlock investment, improve reliability and support electricity-intensive industries.
West Coast Pipeline Push
Ottawa and Alberta have advanced a framework for a new West Coast oil pipeline, with national-interest designation possible by October 2026 and construction as early as 2027. If realized, it would diversify export markets, reduce U.S. dependence, and reshape energy logistics.
Power Readiness Becomes Bottleneck
Large digital and industrial projects are increasing pressure on electricity availability, especially in the Eastern region. Authorities are advancing the power development plan, direct renewable PPAs, and green tariff options, making energy access and decarbonization central investment-screening factors.
Sanctions Escalation and Uncertainty
US sanctions pressure is intensifying, with about 1,000 individuals, vessels, and aircraft added since early 2025. Continued exposure to snapback measures, secondary sanctions, and shifting nuclear-talk outcomes complicates compliance, contract enforcement, financing, and long-term investment planning in Iran-linked business.
Hormuz shipping and energy shock
Strait of Hormuz instability is raising freight, fuel and insurance costs for Israeli companies and importers. Higher oil and LNG prices, shipping delays and rerouted maritime traffic amplify inflation, pressure industrial input costs and complicate procurement, export scheduling and supply-chain resilience planning.
Rising Trade Remedy Exposure
Vietnamese exporters face growing anti-dumping pressure in key markets. Australia opened a galvanised steel case citing an alleged 56.21% dumping margin, while US shrimp duties range from 6.76% to 10.76% for reviewed firms, with 132 companies still facing 25.76% nationwide rates.
Civilian Economy Demand Weakness
PMI data show broad deterioration outside defense industries: services remained in contraction at 49.7 in April, manufacturing fell to 48.1, and composite PMI was 49.1. Weak orders, fragile customer finances, and lower confidence signal softer domestic commercial demand.
BOJ Tightening and Yen Volatility
The Bank of Japan’s 0.75% policy rate faces strong pressure to rise to 1.0% as traders price roughly 77% odds of a June hike. Higher borrowing costs, yield shifts, and yen volatility will affect financing, hedging, import pricing, and export competitiveness.
Trade reorientation and payment shifts
Sanctions have accelerated dedollarization, greater yuan use and rerouting through China, Türkiye, the UAE and Central Asia. This supports continued trade, but adds settlement complexity, intermediary risk, weaker market quality and higher due-diligence requirements for cross-border business.
Energy Policy and Industrial Inputs
Energy remains a sensitive issue in trade talks and domestic policy, particularly after years of tighter state control. For manufacturers, uncertain market access and bottlenecks in electricity, fuels, and critical inputs can weaken competitiveness and slow expansion of energy-intensive operations.
Hormuz Shipping Disruption Risk
The Strait of Hormuz remains a critical chokepoint, with traffic reportedly collapsing from a pre-conflict average of 138 daily transits to single digits. Shipping insecurity, tanker attacks, and blockade-related delays materially raise freight, insurance, and inventory costs for regional trade flows.
External Shipping Routes Increase Risk
Vessel diversions around the Cape of Good Hope are adding roughly 10 to 14 days to transit times and increasing fuel, insurance and surcharge costs. South Africa gains traffic, but importers and exporters face congestion, inventory risk and schedule volatility.
US-China Trade Truce Fragility
Beijing and Washington are negotiating only limited stability measures as tariffs, Section 301 probes and retaliatory actions remain active. With bilateral goods trade down 29% to $415 billion in 2025, firms should expect renewed tariff volatility, compliance costs and demand re-routing.
Red Sea Port Expansion
Port and shipping expansion is accelerating under the logistics strategy, with 18 new maritime services totaling 123,552 TEUs and container throughput up 20.89% year on year in February. Better connectivity supports trade, re-export, warehousing and distribution investment decisions.
Critical Minerals Build-Out Expands
Canada is scaling critical minerals and battery-material investments through public funding, transmission upgrades and project finance, notably in British Columbia and Quebec. This strengthens North American supply-chain positioning in lithium, copper and rare earths, while creating opportunities in processing, infrastructure and partnerships.