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:
Labor Constraints Limit Reshoring
US reshoring ambitions face a workforce bottleneck. Manufacturing had roughly 394,000 to 449,000 unfilled jobs in late 2025, with a projected 2.1 million-worker shortfall by 2030, constraining factory expansion, operating costs, and timelines for greenfield investment.
Nearshoring Advantage Faces Bottlenecks
Mexico remains central to North American nearshoring, with bilateral U.S.-Mexico trade exceeding $839 billion in 2024 and Mexico’s U.S. import share rising to 15.6%. Yet investment momentum is being constrained by policy uncertainty, delayed decisions and operational bottlenecks in infrastructure, energy and permitting.
Tariff Regime Legal Volatility
US trade policy remains highly unpredictable after courts struck down major tariffs, yet new duties are being rebuilt through Section 122, 232 and 301 tools. Importers face refund complexity, abrupt cost changes, and harder pricing, sourcing and investment decisions.
Renewables And Green Hydrogen Push
Egypt is accelerating renewable manufacturing and green hydrogen projects, including wind-turbine localization and the Obelisk ammonia venture. This supports long-term industrial decarbonization and export potential, but investors must still monitor execution risks around financing, infrastructure, water supply, and offtake.
Credit Stability Amid Fiscal Strain
S&P reaffirmed Israel at A/A-1 with a stable outlook, citing innovation capacity and ceasefire-related de-escalation, but warned elevated defense spending and geopolitical risk will pressure public finances. This supports financing access, yet keeps sovereign-risk and borrowing-cost sensitivity high.
Power Market Reforms Still Delayed
Electricity conditions are better, but structural reform remains incomplete. Eskom unbundling, wholesale market rules, transmission independence, and grid expansion are advancing slowly, with only 270.8 km of new powerlines built against a 423 km target, limiting long-term investment visibility.
Weak Growth, Fiscal Stimulus
Thailand’s 2026 growth outlook has been cut to 1.5%-1.6%, prompting discussion of roughly 500 billion baht in new borrowing and broad consumer relief. For investors, this signals softer domestic demand, rising sovereign policy intervention, and potential pressure on public finances.
Energy exports support regional role
Israel’s gas exports remain strategically important, especially to Egypt, which expects May imports from Israel to rise 21% to 32.56 million cubic meters daily. This strengthens Israel’s regional energy position, but infrastructure dependence also leaves trade flows exposed to geopolitical shocks.
Electricity Subsidies and Policy Intervention
Tokyo is weighing about $3.1 billion in electricity subsidies for July-September as LNG costs feed into tariffs. While supportive for households and industry, repeated intervention underscores utility market stress and adds uncertainty for energy-intensive investors planning medium-term operating costs.
US Trade Negotiation Exposure
Thailand is accelerating talks with Washington on a reciprocal trade agreement while responding to a Section 301 review. The process could reshape tariff treatment, sourcing patterns, and US-linked supply chains, especially for agriculture, energy, and export manufacturing.
US Tariffs And Trade Uncertainty
Taiwan’s trade outlook is increasingly tied to unresolved US tariff talks, Section 301 investigations, and potential semiconductor duties. Taipei is seeking to preserve a 15% non-stacking tariff arrangement, while uncertainty until at least July complicates pricing, sourcing, investment timing, and market-entry decisions for exporters.
Weak Domestic Demand Split
China’s recovery remains unbalanced. April manufacturing PMI held at 50.3 and export orders returned to expansion, but non-manufacturing PMI fell to 49.4, a 40-month low. Weak consumption and services demand constrain revenue growth for consumer, retail, and domestic-facing investors.
Industrial Policy Shifts Regional Competition
South Africa retains strong industrial depth, but competitiveness pressures are visible. Nissan redirected a $45 million manufacturing expansion to Egypt, citing lower costs and better export positioning, while South Africa pushes EV incentives and regional financing to sustain automotive and processing investment.
Digital Competitiveness Supports Operations
Saudi Arabia’s top global ranking in digital readiness and strong progress in cybersecurity and digital services are improving business operations, compliance, and market access. For international companies, this supports faster setup, more efficient administration, and stronger foundations for AI-enabled commercial activity.
Property Slump, Fiscal Constraints
The prolonged housing downturn continues to depress household wealth, local government land-sale revenue, and business confidence. Land-sale income fell 24.4% in the first quarter, while Beijing has turned more cautious on stimulus, limiting support for construction, consumption, and local infrastructure spending.
Critical Minerals Supply Chain Expansion
Australia and Japan expanded critical minerals cooperation with A$1.67 billion in support for projects spanning gallium, rare earths, nickel, cobalt, magnesium and fluorite. This strengthens Australia’s role in strategic supply chains, while creating new investment openings in processing and advanced manufacturing.
Nuclear Talks Shape Business Outlook
Diplomatic negotiations over sanctions relief, uranium limits and maritime access remain a major swing factor for Iran’s business environment. Any breakthrough could improve trade conditions and asset values, while failure would prolong restrictions, policy volatility and geopolitical risk exposure.
Nearshoring Potential, Execution Bottlenecks
Mexico remains a prime nearshoring destination and attracted more than $40 billion in FDI in 2025, yet projects are slowed by bureaucracy, permit delays and uneven implementation. Investors increasingly judge Mexico on execution capacity rather than proximity alone.
Local Government Debt Deleveraging
China is intensifying efforts to defuse local-government debt through a multiyear swap program and tighter controls on hidden liabilities. Officials say implicit debt has fallen sharply, but deleveraging still constrains infrastructure spending, local procurement, project payments, and credit conditions for regional suppliers.
Critical Minerals Supply Vulnerability
China’s rare-earth and yttrium leverage remains a major U.S. supply-chain weakness, with earlier controls causing shortages in auto production within weeks. U.S. efforts to diversify sourcing and reduce dependence will shape investment in mining, processing, aerospace and advanced manufacturing.
Tourism Foreign Exchange Buffer
Tourism is providing critical foreign-exchange support despite regional volatility. Revenues reached a record $16.7 billion in FY2024/25, arrivals climbed to 19 million in 2025, and stronger services exports partially offset pressure from shipping losses and energy imports.
Energy Damage Constrains Industry
Repeated attacks on power and gas assets are undermining industrial output, increasing backup-power costs, and creating operational volatility. Naftogaz reported multiple facilities hit in 24 hours, while energy-sector damage continues to pressure manufacturers, logistics operators, and investors assessing production continuity.
US Trade Relationship Deterioration
Tensions with Washington are becoming a meaningful external trade risk. US scrutiny of Pretoria’s foreign policy, aid suspensions, tariff disputes, and AGOA review create uncertainty for exporters, especially automotive, agriculture, and manufacturing firms dependent on preferential US market access.
Imported Inflation and Cost Pressures
Taiwan’s CPI remains moderate at 1.74%, yet imported cost pressures are building. April import prices rose 9.22% and producer prices 8.54%, reflecting energy and input shocks that could erode margins, complicate pricing decisions, and tighten financial conditions if sustained.
Anti-Corruption Drive Reshapes Governance
Vietnam’s anti-corruption campaign is shifting toward tighter power control, prevention and resolution of stalled projects. This may gradually improve governance and resource allocation, but companies should still expect uneven local implementation, heightened scrutiny in land and procurement matters, and more cautious official decision-making.
Industrial Slump Erodes Competitiveness
Germany’s industrial downturn is deepening across automotive, chemicals, and machinery as output, orders, and business confidence weaken. Industrial production fell 0.7% in March, while multiple forecasters cut growth expectations, increasing restructuring risk, delayed capex, and supplier instability.
Water And Municipal Service Risks
Dysfunctional municipalities and water shortages are increasingly material business risks. Government is advancing a local-government white paper and water-sector reforms through WATERCOM, yet weak service delivery, corruption, and failing local infrastructure continue disrupting industrial sites, labor productivity, and investment decisions.
CUSMA Review Uncertainty Builds
The July CUSMA review is becoming a major business risk as Washington seeks concessions on dairy, digital taxes, procurement, and rules of origin. Even without withdrawal, prolonged annual reviews could freeze cross-border investment and complicate North American supply-chain planning.
Defence Spending Creates Opportunities
Rising security threats and higher defence spending are boosting aerospace, munitions, drones, and advanced manufacturing. BAE expects 9% to 11% earnings growth, but delays to the UK defence investment plan mean suppliers still face uncertainty over procurement timing.
Hormuz Shipping Disruption Risk
Instability in the Strait of Hormuz remains the most immediate trade threat. Traffic has collapsed on some days, vessels have reversed course after attacks, and roughly 20% of global oil and LNG flows normally transit the chokepoint, amplifying freight, insurance, and delivery uncertainty.
Chemicals and Manufacturing Restructuring
Germany’s chemicals sector remains under severe pressure from weak demand, expensive energy and global overcapacity. BASF and industry associations warn of further restructuring, job cuts and closures, signaling broader manufacturing realignment that could reshape supplier networks and regional investment strategies.
Steel Protection Hits Manufacturers
New steel safeguards may support domestic producers but are raising major downstream costs for manufacturers dependent on imported grades. A 50% tariff outside quotas, with some quotas cut by 96%, risks price increases, offshoring decisions and supply disruptions across industrial value chains.
Industrial Output Supply Strain
March industrial production fell 0.5%, after a 2.0% drop in February, led by petrochemicals and fuels. Manufacturers expect another 0.7% decline in April, highlighting fragile operating conditions, inventory pressures, and elevated disruption risks for downstream exporters and suppliers.
Nickel Policy Tightening Intensifies
Indonesia’s tighter nickel quotas, higher benchmark pricing, proposed export levies and possible windfall taxes are raising feedstock costs and policy uncertainty. Chinese investors report quota cuts above 70% at some mines, threatening EV battery, stainless steel and smelter economics.
Investment Climate Improving Rapidly
Foreign direct investment inflows rose from SR28 billion in 2017 to SR133 billion in 2025, with stock reaching SR1.1 trillion. Reforms including wider 100% foreign ownership and streamlined licensing improve entry conditions, though FDI still remains below original Vision targets.
Power Supply For AI Industry
Rapid growth in semiconductors, AI infrastructure and data centers is lifting electricity demand sharply, while grid bottlenecks and reserve constraints persist. Reliable power availability is becoming a core determinant for fab expansion, foreign investment, and high-tech operating resilience.