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:
Immigration and visa policy uncertainty
Shifting U.S. visa rules and politicized immigration enforcement complicate global talent mobility. Employers may face higher costs, slower processing, and tighter eligibility for H-1B and other work visas, constraining staffing for high-skill operations, construction, and tech-enabled supply chains.
Currency strength amid weak growth
The rand has rallied roughly 13% year-on-year despite sub-50 manufacturing PMI readings, reflecting global liquidity and carry dynamics more than domestic fundamentals. For multinationals, volatility risk remains: earnings translation, import costs and hedging needs can shift quickly on risk-off shocks.
Red Sea–Suez shipping volatility
Red Sea security disruptions continue to reroute vessels, weakening Suez Canal throughput and foreign-currency inflows. While recent data show partial recovery (FY2025/26 H1 revenues +18.5%), insurers, transit times, and freight rates remain unstable, affecting Egypt-linked logistics and pricing.
AI governance in retail finance
FCA’s call for input on AI’s long-term impact to 2030 signals reliance on outcome-based frameworks rather than new rules. Online investing firms must prove model governance, explainability and third‑party controls to deploy AI in advice, nudging and surveillance.
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.
Immigration tightening constrains labor
Reduced immigration and restrictive policies are linked to slower hiring and workforce shortages, affecting logistics, agriculture, construction, and services. Analyses project legal immigration could fall 33–50% (1.5–2.4 million fewer entrants over four years), raising labor costs and operational risk.
Digital regulation tightening for platforms
Australia’s under‑16 social media ban (fines up to A$49.5m) and broader eSafety scrutiny are forcing stronger age assurance, content controls and reporting. Multinationals face higher compliance costs, data-handling risk, and potential service changes affecting marketing, customer support and HR.
Energy Geopolitics and Trade Deals
U.S. trade negotiations increasingly bundle energy commitments and geopolitical conditions, as seen in tariff relief tied to partners’ changes in Russian oil purchases. This links market access to energy sourcing, complicating procurement strategies and increasing political risk in long-term offtake contracts.
UK–EU border frictions endure
Post‑Brexit customs and SPS requirements, the Border Target Operating Model, and Northern Ireland arrangements continue to reshape UK–EU flows. Firms face documentation risk, delays, and higher logistics overheads, driving route diversification, inventory buffers, and reconfiguration of distribution hubs serving EU markets.
Macroeconomic rebound with fiscal strain
IMF projects Israel could grow about 4.8% in 2026 if the ceasefire holds, driven by delayed consumption and investment. However, war-related debt, defense spending and labor constraints pressure fiscal consolidation, influencing taxation, public procurement priorities, and sovereign risk pricing.
USMCA review and tariff risk
Washington and Mexico have begun talks on USMCA reforms ahead of the July 1 joint review, with stricter rules of origin, anti-dumping measures and critical-minerals cooperation. Uncertainty raises pricing, compliance and investment risk for export manufacturers, especially autos and electronics.
Tighter tax audits and customs scrutiny
SAT is intensifying enforcement against fake invoicing and trade misvaluation, using CFDI data to trigger faster audits and focusing on import/export inconsistencies and improper refunds. Compliance burdens rise for multinationals, making vendor due diligence, transfer pricing and customs documentation more critical.
Ongoing War Disrupts Trade Flows
The Russia-Ukraine conflict continues to cause major disruptions in international trade, especially in commodities and manufacturing. Persistent hostilities have led to volatile markets, increased insurance costs, and unpredictable logistics, impacting global supply chains and business operations.
External financing and conditionality
Ukraine’s budget and defense sustainability depend on large official flows, including an EU-agreed €90 billion loan and an IMF Extended Fund Facility. Disbursements carry procurement, governance, and reform conditions; delays or missed benchmarks can disrupt public payments and project pipelines.
Energy roadmap uncertainty easing
La Programmation pluriannuelle de l’énergie (PPE) 2035, retardée plus de deux ans, doit paraître par décret. Elle confirme 6 EPR (8 en option) et investissements éolien offshore, solaire, géothermie; l’incertitude passée a freiné appels d’offres.
AI and Tech Export Boom
Taiwan’s exports surged 26% to $743.7 billion in 2025, driven by AI and high-performance computing demand. Major tech firms like TSMC and Foxconn posted record profits, but concerns linger over an AI bubble and overdependence on tech exports.
China-Pakistan Economic Corridor Expansion
CPEC 2.0 is broadening into agriculture, IT, minerals, and logistics, with China pledging up to $10 billion in new investments. This deepens Pakistan’s integration with Chinese supply chains and technology, but increases exposure to geopolitical and regulatory risks for international firms.
AI regulation and compliance burden
China is expanding AI governance via draft laws and sector rules, emphasizing safety, content controls, and data governance. Foreign firms deploying AI or integrating Chinese models face product localization, auditability demands, and higher legal exposure around censorship and algorithm accountability.
Red Sea security and shipping risk
Renewed Houthi threats and Gulf coalition frictions around Yemen heighten disruption risk for Red Sea transits. Even without direct Saudi impact, rerouting, insurance premiums, and delivery delays can affect import-dependent sectors, project logistics, and regional hub strategies.
Large infrastructure pipeline execution
Sheinbaum’s 2026–2030 plan targets roughly MXN 5.6–5.9 trillion (about $323B) across 1,500 projects, heavily weighted to energy, rail and roads, plus ports. If delivered, it improves logistics; execution, funding structure and procurement transparency remain key risks.
Suez Canal Disruptions Impact Trade
The Gaza conflict caused Egypt to lose $9 billion in Suez Canal revenue over two years, disrupting global shipping and supply chains. Recovery is underway, but ongoing regional instability remains a risk for trade flows and foreign exchange earnings.
State-ownership shift and privatization pipeline
Cairo is signaling greater private-sector space via the State Ownership Policy, IPO/asset-sale plans, and “Golden License” fast-tracking. Opportunities are rising in ports, logistics, manufacturing, and services, but execution risk persists around valuation, governance, and military/state-linked competition in key sectors.
Rail-border bottlenecks and gauge mismatch
Efforts to integrate Ukraine’s rail with EU networks highlight structural constraints: different track gauges require transshipment at borders, creating durable chokepoints. Any surge in exports or reconstruction imports can overwhelm terminals, extending lead times and pushing firms to diversify routing via Danube and road.
Shrinking but Persistent EU-Iran Trade
Despite sanctions, EU-Iran trade persists at low levels—€4.6bn in 2024, mainly machinery, chemicals, and food. However, ongoing sanctions and the IRGC’s terrorist designation by the EU further constrain business, with compliance burdens and reputational risks for European firms.
Digital Sovereignty and Cybersecurity
France has launched a national cybersecurity strategy and a Digital Resilience Index, aiming to reduce technological dependencies and safeguard economic sovereignty. New regulations and investment in digital infrastructure will affect compliance, risk management, and competitive positioning for international firms.
Immigration compliance crackdown on sponsorship
New offences targeting adverts for false visa sponsorships and intensified enforcement reflect tougher Home Office posture. Employers in logistics, care, hospitality and tech face higher due-diligence and audit expectations, potential licence risk, recruitment friction and reputational exposure in supply chains.
Border crossings and movement controls
The limited reopening of Rafah for people—under Israeli security clearance and EU supervision—highlights how border-regime shifts can quickly change labor mobility, humanitarian flows and regional political risk. Businesses should expect sudden permitting changes affecting contractors, travel and project timelines.
AUKUS and Indo-Pacific Security Dynamics
Australia’s deepening defense ties with the US and UK through AUKUS reinforce its strategic role in the Indo-Pacific. This alliance supports supply chain security and regional stability, but also increases expectations for Australia’s defense spending and self-reliance amid rising China-US competition.
Automotive Sector Crisis and Chinese Competition
The German automotive sector faces overcapacity, declining exports, and fierce competition from Chinese EVs. Structural adjustments, supply chain localization, and rapid technological change are reshaping the industry, with job losses and investment risks affecting the broader manufacturing ecosystem.
Dezenflasyon ve lira oynaklığı
Ocak 2026 enflasyonu yıllık %30,65, aylık %4,84; konut %45,36 artışta. Dezenflasyon sürse de kur ve fiyat oynaklığı ücret, kira, girdi maliyetleri ve fiyatlama stratejilerinde belirsizlik yaratıyor; stok, kontrat ve hedge ihtiyacını artırıyor.
Internal Unrest and Political Crackdown
Mass protests over economic hardship and government repression have resulted in thousands of deaths and ongoing internet blackouts. Political instability and human rights concerns heighten unpredictability for foreign investors and may trigger further international punitive measures.
Currency Volatility and Capital Outflows
The South Korean won has weakened to levels not seen since the global financial crisis, partly due to the looming $350 billion investment outflow. This volatility raises financial risks for international investors and complicates funding for large-scale projects and trade settlements.
Ruble Volatility and Financial Policy
The ruble’s real effective exchange rate surged 28% in 2025 due to trade surpluses and high interest rates, reducing inflation but hurting export competitiveness and budget revenues. Currency volatility complicates financial planning, pricing, and investment for international businesses operating in Russia.
Rising cyber risk and compliance
La stratégie nationale cybersécurité 2026-2030 répond à un record de 348 000 atteintes en 2025 (+75% en cinq ans). Priorités: formation, sécurisation technologique, préparation de crise, mobilisation du privé et réduction des dépendances, renforçant obligations fournisseurs et audits.
Macroeconomic Reform and Privatization Drive
Egypt is accelerating economic reforms, including privatization and reducing state economic involvement, to attract foreign investment. The government aims for over 70% private sector investment by 2030, supported by IMF-backed policies, improved credit ratings, and targeted sector incentives.
Volatile US rate-cut expectations
Markets are highly sensitive to clustered US labor, retail, and CPI releases, with shifting expectations for 2026 Fed cuts. Exchange-rate and financing-cost volatility impacts hedging, M&A timing, inventory financing, and emerging-market capital flows tied to US dollar liquidity.