Mission Grey Daily Brief - November 11, 2024
Summary of the Global Situation for Businesses and Investors
The election of Donald Trump as the next US President has sent shockwaves through the global economy, with markets and businesses bracing for the impact of his policies. Trump's protectionist stance and threat of tariffs on imports from China and Europe have raised concerns about a potential trade war, with Asia and Ireland particularly exposed. Meanwhile, Taiwan welcomed Trump's victory, but analysts warn of potential risks to its relationship with the US and China.
Trump's Tariff Plan and the Global Economy
Donald Trump's election as the next US President has sent shockwaves through the global economy, with markets and businesses bracing for the impact of his policies. Trump has threatened tariffs of up to 60% on imports from China and 10-20% on imports from Europe, which could trigger a global trade war. Asia, which contributes the largest share of global growth, is particularly exposed, with production chains closely linked to China and significant investment from Beijing. Ireland, with its large exposure to the US market, is also vulnerable, as 75% of its goods exports to the US are chemical or pharma products produced by US multinationals operating in the country.
Taiwan's Relationship with the US and China
Taiwan has publicly hailed Trump's victory, but analysts warn of potential risks to its relationship with the US and China. Trump has suggested that Taiwan should pay the US for its defence and accused the island of stealing the US semiconductor industry. Taiwan's President Lai Ching-te has expressed confidence in continued US support, but analysts say that Trump's policy on Taiwan is highly uncertain. Taiwan could be caught in the middle of a trade war between the US and China, and any miscalculation by the Trump administration could be costly.
Indonesia's Trade Concerns
Indonesia's businesses are concerned about the impact of Trump's protectionist policies on their access to the US market and competition with Chinese producers. Chinese producers may reroute their goods to Southeast Asia, including Indonesia, if they face similar barriers to the US market. Indonesia's exports to the US could also be affected by Trump's policies, as the US is the second-largest export market for Indonesian goods. Indonesia's government is considering actions to minimise the negative impact, including pushing for trade deals, diversifying export markets, and improving competitiveness.
Trump's Approach to the EU and UK
Trump is expected to target the EU over the UK in a potential trade war, as he wants to see a successful Brexit. Trump is likely to give a preferential trade deal to the UK, while tariffs will more greatly affect the EU than the UK. Trump believes in the special relationship between the US and the UK and wants to help with a successful Brexit. The UK chancellor is expected to promote free and open trade between nations as a cornerstone of UK economic policy, calling for continued partnerships with Europe, the Middle East, Asia, and the US.
Further Reading:
Asia, the world's economic engine, prepares for Trump shock - Japan Today
Eoin Burke-Kennedy: Ireland’s €54bn exposure to Trump’s tariff plan - The Irish Times
Indonesia’s businesses fear deluge of Chinese goods after Trump takes office - asianews.network
Turkey Deports 325 Afghan Nationals In 48 Hours - Radio Free Europe / Radio Liberty
Themes around the World:
Cryptocurrency as a Sanctions Evasion Tool
Iran’s central bank has purchased over $500 million in USDT (Tether) to defend the rial and facilitate trade, reflecting a shift toward digital assets to bypass financial restrictions. This strategy highlights both the regime’s adaptability and the increasing complexity of compliance for international firms engaging with Iran.
US–China tariff escalation risk
Persistent US tariff actions and Section 301 measures, plus partner-country spillovers (e.g., Canada EV quota deal drawing US threats), increase landed costs, compliance complexity, and transshipment scrutiny—raising uncertainty for exporters, importers, and North America–linked supply chains.
China decoupling in high-tech
Stricter export controls, higher chip tariffs and conditional exemptions tied to U.S. fab capacity reshape electronics, AI infrastructure and China exposure. Firms face redesign of product flows, licensing risk, higher component costs, and pressure to localize critical semiconductor supply chains.
Freight rail recovery, lingering constraints
Rail performance is improving, supporting commodities exports; Richards Bay coal exports rose ~11% in 2025 to over 57Mt as corridors stabilised. Yet derailments, security incidents, rolling-stock shortages and infrastructure limits persist, elevating logistics risk for bulk and containerised supply chains.
Energy balance: gas, power reliability
Declining domestic gas output and seasonal demand spikes raise LNG import needs and elevate power-supply stress. Businesses face risks of higher tariffs, intermittent load management, and input-cost volatility for energy-intensive manufacturing. Energy contracts, backup generation, and efficiency investments are increasingly material.
Supply Chain and Border Management Uncertainty
The reopening of the Rafah border crossing and ongoing controls highlight persistent uncertainty in supply chain logistics. Restrictions on goods and movement, coupled with complex oversight, continue to challenge humanitarian aid, trade, and operational planning for international businesses.
Geopolitical Risks and Regulatory Tensions
US-South Korea trade frictions are compounded by regulatory disputes, such as perceived discrimination against US tech firms operating in Korea. These tensions risk retaliatory measures, complicate compliance for multinationals, and may spill over into other sectors, including digital services.
Regulatory unpredictability and enforcement
Sector-focused campaigns and uneven local enforcement create compliance uncertainty in areas such as antitrust, national security reviews, and ESG/labor enforcement. International firms should expect faster investigations, reputational exposure, and the need for stronger internal controls and local engagement.
Cybersecurity Regulation and Investment Surge
Israel is advancing comprehensive cyber laws and attracting significant investment in cybersecurity startups. New regulations will require real-time reporting of attacks, affecting hundreds of critical companies and shaping compliance, risk management, and business continuity strategies.
US-Led Board of Peace Reshapes Governance
The establishment of the US-chaired Board of Peace, with Israel as a member, is redefining post-war Gaza governance and reconstruction. The board’s broad mandate and financial requirements create new frameworks for international engagement, but also provoke political tensions and uncertainty for investors.
Surge in Foreign Direct Investment
FDI inflows to India rose 73% to $47 billion in 2025, driven by services and manufacturing. Sustaining this growth requires policy stability, targeted reforms, and improved ease of doing business, as global volatility and competition from Vietnam and Malaysia intensify.
‘Made in Europe’ Strategy Debated
France champions the EU’s ‘Made in Europe’ industrial strategy to counter Chinese imports and strengthen supply chains. Internal EU divisions over protectionism versus openness create uncertainty for multinational firms, affecting procurement, investment, and market access decisions.
Agricultural Export Access and Resilience
China’s tariff cuts on canola, peas, and seafood restore access to a market worth billions for Canadian farmers. The agreement alleviates pressure from previous trade disputes, but ongoing geopolitical risks and market concentration remain key concerns for agri-food exporters.
US-Australia Strategic Minerals Partnership
Australia and the US have deepened cooperation on critical minerals, with multi-billion-dollar funding and joint ventures. This partnership supports supply chain diversification for Western industries, boosts investment opportunities, and reduces exposure to geopolitical shocks from China.
Saudization and workforce constraints
Saudi Arabia is tightening localization rules, restricting expatriates from certain senior and commercial roles and raising Saudization ratios in sales/marketing. Multinationals must redesign org charts, compensation, and compliance processes, increasing operating costs and talent-transition risk.
Industrial policy reshapes investment
Federal incentives and procurement preferences for semiconductors, EVs, batteries, and critical minerals are accelerating domestic buildouts while tightening local-content expectations. Multinationals may gain subsidies but must manage higher US operating costs, labor constraints, and complex reporting requirements tied to funding.
USMCA Review and North America Rules
Washington and Mexico have begun talks ahead of the July 1 USMCA joint review, targeting tougher rules of origin, critical‑minerals cooperation, and anti‑dumping measures. Automotive and industrial supply chains face redesign risk, while Canada‑US tensions add uncertainty for trilateral planning.
Labor Reform and Compliance Pressures
Sweeping labor reforms—including a reduced 40-hour workweek, higher minimum wages, and stricter inspections—are reshaping Mexico’s labor market. These changes increase compliance costs and operational complexity, particularly for manufacturing, logistics, and digital platform employers, with direct implications for competitiveness and labor relations.
US Tariffs and Trade Tensions
Vietnam faces significant headwinds from persistent US tariffs, currently at 20% on key exports, with further tariff proposals under debate. These measures threaten export revenues, supply chain stability, and investment planning, especially for US-focused manufacturers.
Tariff Reforms and Protectionist Contradictions
Pakistan’s new tariff schedule lowers input duties but maintains high tariffs on finished goods, creating a protectionist environment. This duality discourages export growth and innovation, limiting the country’s integration into global value chains and affecting international trade strategies.
Foreign Investment Scrutiny and Security
US authorities have tightened restrictions on foreign, especially Chinese, investment in strategic sectors and real estate near sensitive sites. Expanded CFIUS powers and state-level laws increase compliance burdens and impact cross-border M&A and supply chain localization.
Defense procurement surge and controls
Large US-approved arms packages and sustained defense demand support Israel’s defense-industrial base but heighten regulatory sensitivity. Companies in dual-use, electronics, aviation, and logistics face tighter export-control, end-use, and supply-chain traceability requirements, plus potential delays from licensing and oversight.
Mercosur-EU Trade Agreement Reshapes Landscape
The landmark Mercosur-EU agreement, covering over 90% of bilateral trade, will eliminate most tariffs and create one of the world’s largest free trade zones. While it promises a €6 billion GDP boost by 2044 and expanded market access, it also introduces strict regulatory and environmental standards, impacting supply chains, investment, and compliance costs.
Tightened Foreign Investment and Land Rules
Japan is intensifying scrutiny of large-scale land acquisitions and raising barriers for foreign business visas, requiring higher capital and stricter compliance. These changes aim to protect national interests but may deter smaller foreign investors and impact market entry strategies.
EU Green Deal and CBAM Impact
The EU’s Carbon Border Adjustment Mechanism (CBAM) and green deal policies are reshaping Turkey’s export landscape. Sectors with high carbon intensity face new costs and compliance requirements, affecting competitiveness in key markets and driving urgent green transition needs.
Fiscal Policy and Debt Volatility
Japan's snap election and expansionary fiscal policies have triggered sharp volatility in government bonds and the yen, raising global market risks. Debt servicing costs could rise to 20-25% of expenditure, impacting fiscal sustainability and investor confidence.
Supply Chain Disruptions and Humanitarian Restrictions
Israeli restrictions on aid organizations and border crossings, especially at Rafah, have disrupted humanitarian flows and supply chains. New registration requirements and ongoing security measures complicate logistics for international businesses and NGOs, raising operational and reputational risks.
USMCA review and stricter origin
The 2026 USMCA joint review is moving toward tighter rules of origin, stronger enforcement, and more coordination on critical minerals. North American manufacturers should expect compliance burdens, sourcing shifts, and potential disruption to duty-free treatment for borderline products.
China decoupling in advanced tech
Tightened export controls and new duties on advanced semiconductors/AI chips are reshaping global electronics supply chains. Firms face licensing, compliance, and redesign costs, while China accelerates substitution. Expect higher component prices, longer qualification cycles, and intensified scrutiny of technology transfers.
Rail recovery and open-access shift
Transnet reports improving rail volumes from a 149.5 Mt low (2022/23) toward 160.1 Mt (2024/25) and a 250 Mt target, alongside reforms enabling 11 private operators. Better rail reliability lowers inland logistics costs but transition risks remain during access-agreement rollout.
Digital restrictions and cyber risk
Internet shutdowns and heightened cyber activity undermine payments, communications, and remote operations. For foreign firms, this increases business-continuity costs, data-security risks, and vendor performance uncertainty, particularly in e-commerce, logistics coordination, and financial services interfaces.
Tariff rationalisation amid protectionism
Recent tariff schedules cut duties on many inputs, improving manufacturing cost structures, while maintaining high protection on finished goods in select sectors. This mix changes sourcing decisions, compliance requirements, and effective protection rates, influencing export orientation versus domestic-market rent-seeking.
Supply Chain Dominance and China’s Role
China’s deep integration in Indonesia’s nickel mining and processing sectors has entrenched its dominance in the EV battery supply chain. This reliance on Chinese capital and technology exposes Indonesia to external shocks, environmental concerns, and limited leverage in global value chains.
Oil exports shift toward Asia
Discounted Iranian crude continues flowing via opaque logistics and intermediaries, with China and others adjusting procurement amid wider sanctions on other producers. For energy, shipping, and trading firms, this sustains volume but raises legal exposure, documentation risk, and payment complexity.
Labor Market Weakness Amid Economic Growth
While US GDP growth remains strong, job creation has slowed, with unemployment rising to 4.4%. AI-driven productivity gains and reduced immigration contribute to a decoupling of growth from employment, raising social and political risks for businesses dependent on domestic demand.
Energy Transition Policy Uncertainty
Despite record renewable capacity in 2025, France’s energy transition is hampered by policy delays and political debate. Over 70% of energy needs are still met by imported fossil fuels, increasing exposure to global shocks and complicating long-term investment in green infrastructure.