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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

Donald Trump’s victory in US election could be costly for Taiwan, analysts say - Hong Kong Free Press

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

Trump to target EU over UK in trade war as he wants to see ‘successful Brexit’, former staffer claims - The Independent

Trump told Putin not to escalate war in Ukraine days after the election, reports say - The Independent

Turkey Deports 325 Afghan Nationals In 48 Hours - Radio Free Europe / Radio Liberty

Themes around the World:

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Multi-front conflict security risk

Ongoing confrontation involving Gaza, Iran, Hezbollah and Red Sea spillovers continues to disrupt logistics, staffing and investor planning. Businesses face elevated contingency costs, air-travel interruptions, project delays and sudden operational restrictions tied to security alerts and military escalation.

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China Supply Chain Balancing

South Korea and China reaffirmed cooperation on rare earths, urea and other critical materials, while broader tensions over Taiwan complicate diplomacy. Businesses benefit from supply-chain dialogue and FTA talks, but should plan for policy friction and geopolitical compliance risks.

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Sanctions And Strategic Alignment

Canada continues tightening sanctions, including new measures on Russia, while aligning strategic industries with trusted partners and reducing exposure to non-allied supply chains. This raises compliance demands for multinationals and favors investment structures linked to allied sourcing, defence and critical minerals.

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AI Infrastructure Power Bottlenecks

Explosive data-center expansion is straining US electricity systems, especially PJM, where shortages could emerge as soon as next year. Rising tariffs, lengthy interconnection queues, and transformer lead times of 18-36 months are influencing site selection, utility costs, and industrial investment feasibility.

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Trade Rerouting Through Third Markets

As bilateral frictions persist, Chinese trade and production are increasingly routed via Southeast Asia, Mexico, and other connector economies. This may reduce direct exposure but increases compliance, origin verification, customs scrutiny, and investment reassessment across regional manufacturing networks.

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Foreign Capital Targets UK Projects

The government is actively courting overseas institutional investors, including a goal to attract £99 billion of Australian pension capital by 2035 into infrastructure, clean energy, housing and innovation. This supports project pipelines, but execution depends on policy credibility, regulatory stability and returns.

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Yen Volatility and Intervention

Tokyo has likely spent about 10 trillion yen, including roughly $35 billion on April 30 and up to 5 trillion yen in early May, to support the yen. Currency swings raise import costs, pricing risk, hedging needs, and earnings volatility.

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Electricity Tariff Affordability Pressure

Although blackouts have receded, electricity costs remain a major competitiveness problem. Government says double-digit tariff increases should end, yet high power prices are squeezing households, lowering demand, and raising operating expenses for mines, smelters, manufacturers, retailers, and logistics operators.

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Gas Upstream Recovery Effort

Cairo is restoring investor confidence in hydrocarbons by clearing arrears and incentivizing exploration. Debt to international oil companies fell from $6.1 billion in mid-2024 to roughly $714–770 million, while new discoveries could reduce import needs and support industry.

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Export Manufacturing Outpaces Consumption

April data show manufacturing resilience but weak domestic demand. Official manufacturing PMI held at 50.3, while new export orders rose to 50.3, yet non-manufacturing PMI fell to 49.4, a 40-month low, signaling an increasingly unbalanced, externally dependent growth model.

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Stricter Russia sanctions compliance

Britain is tightening export licensing to prevent diversion of goods through third countries into Russia. Companies trading in dual-use or sensitive sectors face greater compliance burdens, border delays, and legal exposure, making sanctions screening and end-destination due diligence increasingly critical for exporters.

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US-EU tariff escalation risk

France faces renewed exposure to transatlantic trade disruption as Washington threatens 25% tariffs on EU vehicles and maintains elevated metals duties. Paris is pushing tougher EU countermeasures, raising uncertainty for exporters, automotive supply chains, pricing decisions, and cross-border investment planning.

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US Tariffs Hit Exports

Germany’s export model faces acute pressure from renewed U.S. tariff threats and weaker shipments. March exports to the United States fell 7.9% month on month and 21.4% year on year, raising risks for autos, machinery, suppliers, and transatlantic investment planning.

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Semiconductor Export Boom Concentration

South Korea’s April exports jumped 48% to $85.89 billion, with chip shipments soaring 173.5% to $31.9 billion. The AI-driven surge boosts trade and investment, but deepens dependence on semiconductors as autos and machinery face tariff and competition pressures.

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Logistics and Port Capacity Strains

Surging agricultural and mineral exports are increasing pressure on Brazil’s logistics corridors, ports and customs processing. As export volumes rise, congestion, first-come quota allocation and infrastructure bottlenecks can disrupt delivery schedules, inventory planning and landed costs for globally integrated businesses.

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Electricity Market Reform Transition

Power availability has improved materially, with 341 days without load shedding and no winter outages expected, but business risk is shifting toward reform execution. Eskom unbundling, delayed wholesale market rules, and slow transmission expansion still shape investment timing for energy-intensive sectors.

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Automotive Profitability Under Strain

Germany’s carmakers face overlapping pressure from US tariffs, softer China demand, and elevated input costs. Bernstein estimates the extra US duty alone could cut operating profit by about €2.6 billion, with Audi, Porsche, and Volkswagen particularly exposed.

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Electronics Export Boom Dependency

Electronics exports surged 55.4% year on year by mid-April, reinforcing Vietnam’s role in global manufacturing. But the sector remains heavily dependent on imported machinery and components, leaving supply chains exposed to trade barriers, logistics disruption, and foreign supplier concentration.

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Energy Import Diversification Push

Seoul is considering softer FTA documentation rules for crude imports routed through third countries to encourage non-Middle Eastern supply, including from the United States. This could reshape procurement strategies, refinery trade flows, and energy-security investment decisions across Northeast Asia.

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Tighter Investment Security Scrutiny

CFIUS and broader national-security screening remain central to foreign investment in US strategic sectors. Reviews increasingly examine ownership structures, governance and technology exposure, lengthening deal timelines and complicating cross-border acquisitions, joint ventures and capital deployment in advanced manufacturing and infrastructure.

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Third-Country Evasion Networks Tighten

EU action against Kyrgyzstan and entities in China, the UAE, Kazakhstan and Uzbekistan shows intensifying pressure on re-export and sanctions-circumvention channels. Companies using Eurasian intermediaries now face higher due-diligence burdens, rerouting risk and potential sudden disruption of previously workable procurement corridors.

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Supply Chain Diversification Pressure

Companies are still reducing direct China exposure as trade friction, sanctions risk and export controls become structural rather than temporary. China’s record surplus increasingly reflects rerouting through Southeast Asia, while multinationals face rising pressure to build dual-source manufacturing, inventory buffers and origin-traceability systems.

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Remittance and Gulf Dependence Risks

Pakistan’s external accounts rely heavily on Gulf remittances, with record flows of $38.3 billion and over half coming from Saudi Arabia and the UAE. Regional conflict, labor-market changes, or visa restrictions could weaken household consumption, reserves, and currency stability.

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Shadow Fleet Trade Rewiring

Russia continues relying on a shadow tanker fleet now estimated at roughly 600-800 vessels to bypass price-cap restrictions and preserve hydrocarbon exports. This sustains trade flows but raises shipping, insurance, sanctions-enforcement and environmental risks for firms exposed to opaque maritime networks.

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Export Surge and Demand Concentration

Trade performance remains exceptionally strong, but increasingly concentrated in AI-related electronics. Electronic components and ICT products account for 78.5% of exports, while Q1 shipments jumped 51.12%, heightening exposure to cyclical tech demand, trade-policy shifts, and customer concentration in overseas markets.

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Infrastructure Damage and Industrial Disruption

Strikes on refineries, power plants, petrochemicals, and industrial facilities are degrading productive capacity and exports. Reported infrastructure damage exceeds $200 billion, with steel output down by up to 30%, worsening shortages of inputs, electricity, and logistics reliability for manufacturers and traders.

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Power and Clean Energy Constraints

Thailand’s investment push increasingly depends on electricity readiness, renewable procurement, and grid upgrades. Authorities are advancing Direct PPA, green tariffs, and new power planning, but energy availability and rising costs remain critical constraints for manufacturers and data centres.

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Reconstruction Capital Still Constrained

Ukraine’s recovery needs are estimated near $588 billion over the next decade, versus current wartime financing focused mainly on state continuity. Private investment remains limited by war-risk insurance gaps, absorption capacity, and uncertainty over future reconstruction finance architecture.

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Digital Infrastructure Expands Beyond Java

Indonesia’s digital economy is attracting data-center investment, supported by AI demand, cloud expansion, and personal-data rules emphasizing sovereignty. New projects in eastern Indonesia and Batam aim to improve redundancy, but power availability, connectivity, green energy, and skilled labor remain key operational constraints.

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Debt Burden Pressures Markets

U.S. public debt has moved above GDP, reaching about $31.27 trillion, while interest costs approach $1 trillion this fiscal year. Rising issuance, weaker Treasury safe-haven behavior and elevated yields can tighten financing conditions, affect valuations and raise hedging costs globally.

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Fiscal stabilization supports confidence

Moody’s says government debt may have peaked at 86.8% of GDP in 2025 and could decline to 84.9% by 2028. Narrower deficits and stronger tax collection support macro stability, though high interest costs still limit policy flexibility and public investment.

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Strong shekel export squeeze

The shekel’s appreciation is eroding margins for exporters and technology firms earning dollars but paying local costs in shekels. The currency rose about 20% against the dollar over 12 months, threatening hiring, investment, factory viability and international price competitiveness.

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SCZONE Logistics Investment Surge

The Suez Canal Economic Zone is emerging as Egypt’s main trade and industrial growth platform. It attracted $7.1 billion this fiscal year and nearly $16 billion in 3.75 years, with East Port Said throughput rising from 2.4 million to 5.6 million TEUs.

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Shekel strength hurting exporters

The shekel’s sharp appreciation is undermining export competitiveness by reducing foreign-currency earnings when converted into local costs. Economists warn sustained currency strength could compress margins, delay hiring and investment, and weaken industrial and technology exporters serving US and European markets.

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Shipbuilding and LNG Expansion

Korean shipbuilders are winning major LNG, ammonia-carrier, gas-carrier, and FSRU orders while the government deepens shipbuilding-shipping coordination. This strengthens Korea’s role in maritime energy infrastructure, benefiting export earnings, industrial suppliers, port logistics, and long-cycle manufacturing investment.

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Semiconductor Concentration and De-risking

Taiwan still produces about 90% of the world’s most advanced chips, keeping it central to AI, automotive, and defense supply chains. Simultaneously, pressure to diversify production abroad is reshaping investment allocation, procurement strategies, and long-term supplier concentration risk.