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.

Themes around the World:

US–Taiwan security funding uncertainty

Taiwan’s proposed multi‑year defence budget and large US arms purchases face domestic legislative bottlenecks, risking delivery delays. For investors, this increases tail-risk volatility, influences sovereign and counterparty risk pricing, and may affect project timelines in strategic sectors.

US–India tariff reset framework

A new interim framework cuts US reciprocal tariffs on Indian-origin goods to 18% (from peaks near 50%) while India lowers barriers on US industrial and selected farm goods. Expect near-term export upside, but compliance, sector carve-outs and implementation timelines remain uncertain.

Rule-of-law and governance uncertainty

Heightened tensions between government and judiciary raise concerns about institutional independence and regulatory predictability. For investors, this can affect contract enforceability perceptions, dispute resolution confidence, and ESG assessments, influencing cost of capital and FDI appetite.

Defense posture and maritime asset protection

Israel is prioritizing protection of Eilat approaches and offshore gas infrastructure, reflected in expanded naval readiness. Persistent maritime threats raise operational continuity and security requirements for ports, energy off-take, subsea cables and critical infrastructure suppliers operating nearby.

Vision 2030 strategy recalibration

PIF’s 2026–2030 strategy reset shifts Vision 2030 from capital-intensive mega-projects toward industry, minerals, AI, logistics and tourism, while re-scoping NEOM and others. For investors, this changes project pipelines, counterparties, procurement priorities and timeline risk across sectors.

Mortgage stress and domestic demand

CMHC flags rising mortgage stress in Toronto and Vancouver; over 1.5M households have renewed at higher rates and another ~1M face renewal soon. A consumer slowdown could weaken retail, construction, and SME credit demand, while increasing counterparty and portfolio risk.

China tech controls and tariff leverage

The U.S. is using conditional semiconductor tariffs and export controls to steer capacity onshore while selectively pausing some China tech curbs amid trade talks. Firms must plan for sudden policy reversals, restricted China exposure, and higher costs for advanced computing supply chains.

China-exposure and strategic asset scrutiny

Beijing warned of potential retaliation over proposals to return Darwin Port from a Chinese lessee, highlighting renewed geopolitics around strategic infrastructure. Firms with China-linked ownership, customers or supply chains face higher political, reputational and contract risks, alongside tighter investment screening.

US–China tech controls tightening

Advanced semiconductor and AI chip trade remains heavily license-bound. Recent U.S. scrutiny over Nvidia H200 terms and penalties for tool exports to Entity-Listed firms signal elevated enforcement risk, end-use monitoring, and disruption to China-facing revenue, R&D collaboration, and capex plans.

Monetary policy amid trade uncertainty

With inflation around 2.4% and the policy rate near 2.25%, the Bank of Canada is expected to hold rates while tariff uncertainty clouds growth and hiring. Financing costs may stay elevated; firms should stress-test cash flows against demand shocks and FX volatility.

Energy transition and green hydrogen scaling

India is driving rapid renewables and green hydrogen cost declines (recent bids near ~$3.08/kg reported), supported by incentives and grid/transmission waivers. This creates opportunities in industrial decarbonisation supply chains (electrolysers, components), but raises offtake, pricing, and infrastructure execution risks.

US tariff and NTB pressure

Washington is threatening to restore 25% tariffs unless Seoul delivers on a $350bn US investment pledge and eases non-tariff barriers (digital rules, agriculture, auto/pharma certification). Policy uncertainty raises pricing, compliance, and sourcing risks for exporters.

Clean-energy localization requirements

Industrial policy and tax credits increasingly favor North American and allied-country content, tightening rules on “foreign” supply chains. Firms in batteries, EVs, solar, and critical minerals must document provenance, redesign sourcing, and manage credit eligibility risk in project economics.

China export curbs on Japan

Beijing sanctioned 40 Japanese entities, restricting exports of dual-use goods to 20 and putting 20 more on a watch list. Escalation over security tensions raises supply-chain disruption risk for aerospace, electronics and automotive, plus countermeasure uncertainty.

BEG subsidies and budget risk

Federal BEG/BAFA support is critical to Wärmewende economics, but annual budget ceilings and frequent program adjustments create stop‑start ordering behavior. International suppliers face higher payment-cycle uncertainty, while investors must model demand cliffs, compliance documentation, and administrative throughput constraints.

Suez Canal security-driven volatility

Red Sea risks remain a first-order supply-chain variable. After a Gaza ceasefire, Suez revenues rose 24.5% and major carriers began returning with naval assistance. Any renewed attacks could again divert vessels around Africa, extending transit times and raising costs.

Nickel governance and reporting gaps

Regulators disclosed a major Chinese-linked nickel smelter failed to submit mandatory investment activity reports, weakening oversight of capital, production, taxes, and environmental compliance. This heightens governance and ESG due-diligence needs for counterparties in Indonesia’s nickel downstreaming ecosystem.

Infraestrutura portuária e concessões

Portos movimentaram recorde de 1,4 bilhão de toneladas em 2025 (+6,1%), com contêineres +7,2%. Leilões e autorizações somaram investimentos bilionários. Para comércio exterior, melhora capacidade e reduz gargalos, mas exige gestão de tarifas, regulação e SLAs logísticos.

Disinflation and tight monetary policy

Annual inflation eased to 30.65% in January, but monthly CPI jumped 4.8%, underscoring sticky services and food risks. The central bank projects 2026 inflation at 15–21% and maintains a cautious stance, affecting credit costs, pricing, and demand planning.

Black Sea corridor security costs

Ukraine’s Odesa-area maritime corridor remains open but under intensified port and vessel attacks, mines, and GNSS spoofing. Volumes are volatile (corridor exports reportedly fell ~45% YoY in April 2025), while war-risk insurance and contractual disruption risk shape freight pricing and trade reliability.

Won volatility and FX buffers

Authorities issued $3bn in FX stabilization bonds as reserves fell to about $425.9bn end‑January, signaling concern about won pressures amid global rates and capital outflows. Importers/exporters should tighten hedging, review pricing clauses, and monitor liquidity conditions.

EV and battery chain geopoliticization

China’s dominance in batteries and EV components is triggering stricter foreign procurement rules and tariffs. New “foreign entity of concern” screening and higher Section 301 tariffs are reshaping project economics, pushing earlier diligence on origin/ownership and boosting demand for non‑China cell, BESS and recycling capacity.

Water scarcity and treaty pressures

Historic drought and Mexico–U.S. water treaty obligations are becoming operational risks, particularly for water-intensive industries in northern hubs. Potential rationing, higher tariffs, and community pushback can disrupt production, requiring water audits, recycling investment, and site selection adjustments.

Energy grid strikes, blackout risk

Russia’s intensified strikes on power plants, pipelines and cables have produced recurring outages and higher industrial downtime. The NBU estimates a 6% electricity deficit in 2026, shaving ~0.4pp off growth and raising operating costs, logistics disruption and force-majeure risk.

Rail connectivity and cross-border links

Saudi Railways moved 30m tonnes freight in 2025 and 14m passengers, displacing ~2m truck trips and cutting 364k tonnes emissions. New rolling-stock deals and the approved Riyadh–Doha high-speed rail deepen regional connectivity for labour, tourism, and time-sensitive cargo.

Incertidumbre por revisión del T-MEC

La revisión obligatoria del T‑MEC hacia el 1 de julio y señales de posible salida o “modo zombi” elevan el riesgo regulatorio. Se discuten reglas de origen, antidumping y minerales críticos, afectando decisiones de inversión, pricing y contratos de largo plazo.

Macroeconomic recovery and rate cuts

Inflation has eased to around 1.8% with a stronger shekel, reopening scope for Bank of Israel rate cuts. Cheaper financing may support investment, yet currency strength can squeeze exporters and pricing, influencing hedging strategies and contract denomination choices.

Stricter data-breach liability regime

Proposed amendments to the Personal Information Protection Act would shift burden of proof toward companies, expand statutory damages, and add penalties for leaked-data distribution. Compliance, incident response, and cyber insurance costs likely rise, especially for high-volume consumer platforms and telecoms.

Industrial carbon pricing competitiveness

Canada is adjusting industrial carbon pricing to cut emissions while protecting competitiveness, with implications for energy-intensive exporters facing EU/other carbon-border measures. Policy design affects operating costs, capital allocation, and product-market access strategy.

Health-tech export platform for simulation

Finland’s health-technology exports exceed €2.5bn with a stated ambition toward €3bn this decade, underpinned by strong digital health infrastructure. This creates a pull for VR training and clinical simulation solutions, but requires rigorous clinical validation and procurement navigation.

Water infrastructure failure risk

Water and sanitation systems face an estimated R400 billion rehabilitation backlog, with many municipalities rated “poor” or “critical.” Recent Gauteng outages affected up to 10 million people after power trips. Operational disruption risks include plant shutdowns, hygiene, and industrial downtime.

EU accession-driven regulatory alignment

With accession processes advancing but timelines uncertain, Ukraine is progressively aligning with EU acquis and standards. International firms should anticipate changes in competition policy, customs, technical regulations, and state aid rules—creating compliance workload but improving long-run market access.

مسار صندوق النقد والإصلاحات

مراجعات برنامج صندوق النقد تركز على الانضباط المالي، توسيع القاعدة الضريبية، وإدارة مخاطر المالية العامة. التقدم أو التعثر ينعكس مباشرة على ثقة المستثمرين، تدفقات العملة الأجنبية، وتوافر التمويل، مع حساسية اجتماعية قد تؤخر قرارات تحرير الأسعار والدعم.

Domestic tax and cost pressures

Business‑rates reforms are creating sharp distributional effects; Treasury indicated nearly 7,000 retail/hospitality/leisure firms may see bills more than double. Combined with employer cost increases, this lifts operating expenses, pressures margins, and can alter location strategy, pricing, and investment payback periods.

Industrial decarbonisation subsidy wave

Paris is deploying large-scale state aid to keep energy‑intensive industry in France: €1.6bn over 15 years for seven sites, targeting ~3.8 Mt CO2/year abatement (~1% of national emissions). Subsidy conditionality and EU state‑aid scrutiny affect project bankability.

Enerji merkezi ve arz güvenliği

Türkiye, gaz transit/dağıtım merkezi olma hedefini LNG altyapısı ve boru hatlarıyla destekliyor; Rus gazı, Azerbaycan ve LNG dengesi kritik. Bölgesel gerilimler fiyat oynaklığı yaratabilir. Sanayi için enerji maliyetleri, sözleşme yapıları ve kesinti riski yönetilmeli.