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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:

As EU leaders meet, Hungary’s Orbán predicts Trump’s administration will end support for Ukraine - CityNews Halifax

Japan’s Ishiba vows to boost military and forge closer ties with US under Donald Trump - The Independent

Newspaper headlines: US economy 'overheating' and 'Ukraine fears' - BBC.com

Six enigmatic words from Donald Trump have set Ukraine, Israel and the world on edge - The Globe and Mail

Trump victory spurs worry among migrants abroad, but it's not expected to halt migration - Spectrum News

Trump’s tariff bombshell: How a 60% levy on Chinese goods could force Taiwanese firms out of China | Today News - Mint

US to send contactors to Ukraine to repair, maintain US weapons - VOA Asia

Ukraine keeps finding Western parts in Russia's weapons, this time in the wreckage of its new heavy Hunter drone - Business Insider

While Syrian refugees don't want to return, officials in Lebanon and Syria see exodus as opportunity - The Independent

Themes around the World:

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USMCA review and North America

The approaching USMCA review is heightening risk for automotive, agriculture, and manufacturing flows across the US–Canada–Mexico corridor. Threatened tariffs and rules-of-origin pressures incentivize nearshoring but complicate cross-border planning, inventory placement, and long-term supplier commitments.

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Export and Import Dynamics Shift

Germany’s modular building exports are rising, supported by demand for sustainable and high-quality solutions in Europe and beyond. Import trends reflect increased sourcing of advanced materials and components, impacting trade balances and supply chain strategies for global firms.

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Record EBRD and Foreign Investment Inflows

The EBRD invested a record €2.7 billion in Turkey in 2025, with 91% in the private sector. Major projects include infrastructure and post-earthquake reconstruction, underlining Turkey’s long-term investment appeal and resilience.

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Massive Reconstruction and Investment Plans

The EU, US, and international institutions are preparing $800 billion in long-term funding for Ukraine’s recovery, focusing on infrastructure, energy, and technology. Implementation depends on security guarantees, peace progress, and overcoming institutional and corruption barriers.

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Semiconductor Supply Chain Dominance

Taiwan remains the global leader in advanced semiconductor manufacturing, with TSMC and related firms central to AI, electronics, and automotive supply chains. Recent US-Taiwan deals reinforce this role, but also expose the sector to geopolitical pressures and relocation risks.

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Customs crackdown on free zones

Customs plans tighter duty-exemption rules and higher per-item fines to curb false origin, under-valuation, and minimal-processing practices in free zones. Likely impacts include stricter ROO documentation, more inspections, longer clearance times, and higher compliance costs for importers and assemblers.

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Geopolitical Uncertainty and Peace Negotiations

US-brokered peace talks with Russia continue, but unresolved issues over territorial concessions and security guarantees create deep uncertainty for investors. The outcome will shape Ukraine’s future market access, reconstruction, and integration with the EU.

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Labor Market Reforms and Nationalization

Saudi Arabia’s labor market reforms, including workforce nationalization and global labor agreements, affect talent acquisition, compliance, and cost structures. Companies must adapt to evolving employment regulations and localization requirements to sustain operations.

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Electric Vehicle Market Disruption

Reduced tariffs allow up to 49,000 Chinese EVs annually into Canada at 6.1%, boosting affordable options and competition. This move could reshape the auto sector, attract Chinese investment, and challenge domestic manufacturers, while provoking US concerns over supply chain security and market share.

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Election-driven fiscal and policy volatility

The Feb 8 election and “populism war” amplify risks of debt-funded stimulus, policy reversals, and slower permitting. Bond-curve steepening on fiscal worries signals higher funding costs and potential ratings pressure, affecting PPPs, SOEs, and investor confidence.

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Palm waste export restrictions

President Prabowo announced a ban on exporting used cooking oil and palm waste to prioritize domestic aviation fuel and biofuel ambitions. The move may tighten regional feedstock availability, disrupt traders’ supply contracts, and increase regulatory risk in Indonesia’s palm-based derivative exports.

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Infrastructure Modernization and Trade Connectivity

Major infrastructure projects, such as the new semi-automated container terminal at Sokhna Port, are enhancing Egypt’s trade connectivity and logistics capacity. These initiatives are vital for supporting export growth and integrating Egypt into global supply chains.

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High Unemployment and Labor Market Shifts

Finland’s unemployment rate has reached 10.6%, the highest in the EU, driven by weak domestic demand and structural changes. While tech and green sectors are hiring, traditional industries face layoffs, affecting consumer demand and workforce availability for international investors.

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Regulatory and Economic Reform Momentum

Recent reforms, including public-private partnerships in energy and logistics, have improved investor sentiment. South Africa’s removal from the FATF greylist and credit rating upgrades signal progress, but policy uncertainty and slow execution remain barriers to sustained investment and economic growth.

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Sanktionsdurchsetzung und Exportkontrollen

Strengere Durchsetzung von EU-Russland-Sanktionen erhöht Compliance-Risiken. Ermittler deckten ein Netzwerk mit rund 16.000 Lieferungen im Wert von mindestens 30 Mio. € an russische Rüstungsendnutzer auf. Unternehmen müssen Endverbleib, Zwischenhändler und Dual-Use-Checks deutlich verschärfen.

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Tech export controls tighten supply

Expanded controls on AI chips, advanced semiconductors, and tooling constrain sales into China and other sensitive markets, while raising compliance burdens worldwide. Firms must redesign products, segment customer access, and harden end‑use diligence to avoid penalties and sudden shipment stoppages.

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US-South Korea Trade Tensions Escalate

The US has raised tariffs on South Korean autos, pharmaceuticals, and other goods from 15% to 25%, reversing previous concessions and straining bilateral relations. This move directly impacts South Korea’s export competitiveness, especially in autos, and adds volatility to global supply chains.

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Energy Sector Under Strain

Iran’s oil exports, once above 2 million barrels per day, remain below pre-2018 levels due to sanctions and trade restrictions. The Strait of Hormuz, a critical chokepoint for global oil, faces heightened risk of disruption, threatening energy markets and shipping security.

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Political Stability and Policy Continuity Risks

The UK’s political landscape remains volatile, with ongoing debates over trade, security, and foreign policy direction. Uncertainty around future elections and leadership could impact investment strategies and long-term business planning for international investors.

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Nearshoring Momentum and Supply Chain Shifts

Mexico’s role as a nearshoring hub is accelerating, driven by US-China tensions and global supply chain recalibration. Firms are relocating manufacturing to Mexico for resilience, but face challenges including labor shortages, infrastructure gaps, and regulatory complexity.

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ESG Standards and Regulatory Pressure

Environmental and social governance (ESG) standards are increasingly shaping investment and operational decisions, especially in mining. While Indonesia is adopting international frameworks, enforcement remains uneven, and companies face rising pressure from global buyers and lenders to improve compliance and transparency.

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Geopolitical Tensions With China Escalate

Japan faces heightened diplomatic and economic tensions with China, including export controls on rare earths and dual-use items. These frictions, triggered by Japan’s pro-Taiwan stance, threaten supply chains for high-tech and automotive sectors, raising operational risks for international businesses.

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Privatisation and SOE restructuring

Government plans broader privatisation after PIA and targets loss-making SOEs to reduce fiscal drain. Transaction structure, governance and regulatory clarity will shape opportunities in aviation, energy distribution and logistics, while policy reversals could elevate political and contract risk.

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Shadow Economy and Sanctions Evasion

Iran’s reliance on shadow fleets, barter trade, and crypto channels to bypass sanctions has grown. US Treasury actions against crypto exchanges and shipping networks highlight enforcement risks for counterparties and the need for enhanced due diligence in all Iran-linked transactions.

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Mercosur-EU Trade Agreement Delays

The ratification of the Mercosur-European Union trade agreement faces legal and political hurdles, with implementation potentially delayed up to two years. This uncertainty affects market access, tariff reductions, and strategic planning for exporters and investors in Brazil.

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Domestic Economic Policy and Inflation Management

Turkey’s central bank continues cautious monetary easing as inflation falls to 30.9% in late 2025, with targets of 16% for 2026. Policy predictability, declining inflation, and supportive infrastructure investments are expected to foster a more stable business environment, though volatility remains a concern.

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Foreign Investment Faces High Uncertainty

Foreign direct investment in Ukraine remains subdued, with FDI at only 0.9% of GDP in late 2025. Investors are cautious due to security risks, regulatory instability, and infrastructure damage, though reconstruction initiatives offer selective opportunities for risk-tolerant capital.

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Fiscal Deficit and Tax Policy Changes

Russia’s budget deficit reached 2.6% of GDP in 2025, the highest since 2020, as energy revenues fell. The government raised VAT and other taxes to offset losses, increasing the fiscal burden on businesses and consumers and creating uncertainty for investors and multinational corporations.

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Labor Localization Tightens Expat Employment

Saudi Arabia has restricted key senior roles to nationals and imposed high Saudization quotas in sales, marketing, and procurement. These changes require international companies to adapt staffing strategies, prioritize local talent, and navigate evolving labor compliance risks.

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Suez Canal Disruptions and Recovery

The Gaza conflict and Red Sea security threats caused Egypt to lose $9 billion in Suez Canal revenue over two years, severely impacting global supply chains and Egypt’s foreign exchange. Gradual resumption of shipping is underway, but risks remain.

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EU Strategic Autonomy and Trade Defense

France is advocating for stronger EU trade defense tools, including the activation of the anti-coercion instrument, to counteract US and Chinese economic pressure. This shift toward strategic autonomy could reshape investment, procurement, and regulatory environments for international companies.

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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.

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US Trade Deficit and Competitiveness Concerns

The US trade deficit widened to $973.5 billion in 2024, reflecting structural challenges such as a strong dollar, underinvestment in manufacturing, and declining export competitiveness. Persistent deficits threaten economic growth and complicate efforts to reshore production.

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US Sanctions and Export Controls Expansion

Recent US sanctions target Iranian officials, financial networks, and entities involved in human rights abuses and illicit oil trade. These measures extend to third-country actors, increasing legal and reputational risks for international firms and complicating global financial transactions.

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Political Polarization and Business Uncertainty

Deepening political divisions and unpredictable policy shifts, especially around elections, undermine regulatory stability and investor confidence. Businesses must navigate volatile labor, tax, and regulatory environments, increasing operational risk and complicating long-term planning.

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Supply Chain Diversification and Resilience

India is actively diversifying supply chains, expanding trade ties with the UK, New Zealand, Oman, and EFTA, and reducing dependence on any single market. This strategy strengthens resilience against global disruptions, supports manufacturing, and ensures continued access to critical inputs and export markets.