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Mission Grey Daily Brief - November 12, 2024

Summary of the Global Situation for Businesses and Investors

The global order is shifting as Donald Trump wins a landslide victory in the US and Germany's coalition government collapses. This marks a shift from neoliberalism to economic realism, with national security considerations taking precedence over market interests. Trump's protectionist policies and China's state-directed capitalism are intensifying geopolitical competition, pressuring businesses to make investment decisions through a geopolitical lens. The era of peak globalisation is behind us, and companies face a choice between rival IT infrastructures, markets, and currency systems. Trump's proposed tariffs and trade war threats are causing concern and uncertainty for many countries, especially those with close trade ties to the US and China.

Trump's Return to the White House and the End of the Neoliberal Era

Donald Trump's return to the White House coincides with the collapse of Germany's coalition government, signalling a shift in the global order. The German government coalition fell apart over disagreements regarding the debt brake, with former Finance Minister Christian Lindner advocating for neoliberal staples such as tax relief, deregulation, and fiscal discipline, while Chancellor Scholz pursues "economic realism", acknowledging that market-driven solutions may no longer work in a world disrupted by geo-economic competition.

Following Russia's invasion of Ukraine, Europe and Russia have economically decoupled, and while a complete decoupling of Western economies from China remains impossible due to extensive interdependence, the Biden administration has turned to export controls, investment restrictions, and a subsidy-driven industrial policy. China's state-directed capitalism is surging to the technological frontier through heavily subsidised industrial policies, threatening industries worldwide.

Trump's protectionist policies and China's state-directed capitalism are intensifying geopolitical competition, pressuring businesses to make investment decisions through a geopolitical lens. The era of peak globalisation is behind us, and companies face a choice between rival IT infrastructures, markets, and currency systems. Diversification, especially in high-tech sectors, is accelerating, potentially leading to competing economic blocs.

Trump's Tariff Plans and the Potential Impact on Global Trade

Trump's proposed tariffs and trade war threats are causing concern and uncertainty for many countries, especially those with close trade ties to the US and China. Trump has threatened to impose tariffs of between 10-20 per cent on all goods coming into the US, and up to 60 per cent on those coming from China, which could trigger global trade wars on a scale we've never seen before.

Indonesia's businesses are concerned that restrictive trade policies from the US will incentivize Chinese producers to divert large quantities of goods to Southeast Asian markets and create barriers for Indonesian exports to the US. Indonesia is China's largest trading partner and the US is the second-largest export market for Indonesian goods, so these policies could significantly impact Indonesia's economy.

Indonesia's government is taking steps to minimize the negative impact of the change of US administration, including pushing for trade deals, diversifying export markets, and improving competitiveness. More regional trade agreements are necessary to navigate the expected wave of protectionism, as such deals would cement a strong foundation for Indonesian businesses to brace for the shift of US policies.

Taiwan's Position in the US-China Trade War

Taiwanese companies with bases in mainland China are in a hurry to relocate back to Taiwan or elsewhere if Donald Trump imposes high tariffs on China. This highlights the delicate position Taiwan finds itself in as it navigates the US-China trade war.

Mexico's Response to Trump's Threats

Mexico is bracing for the challenges ahead as Donald Trump eyes a return to office, with Trump's constant threats on tariffs, massive deportations, and cross-border trade putting the country in a difficult position. Mexico has a new leader, Claudia Sheinbaum, who is more ideological and less pragmatic than the former Mexican president, Andrés Manuel Lopez Obrador.

Sheinbaum's administration could face particular pressure to address US concerns regarding immigration and drug trafficking, and her recent moves to centralize government power by diminishing independent regulatory bodies could violate US-Mexico-Canada Agreement (USMCA) terms, giving Trump grounds to push for trade renegotiations, especially regarding the auto industry and supply chain regulations.

Mexico hopes for peaceful trade dynamics, but experts argue that optimism should be tempered by a realistic understanding of Trump's national security-focused policies, which often prioritize economic protectionism.


Further Reading:

Eoin Burke-Kennedy: Ireland’s €54bn exposure to Trump’s tariff plan - The Irish Times

How A Second Trump Term Could Strain U.S.-Mexico Relations To The Breaking Point - Reform Austin

Indonesia’s businesses fear deluge of Chinese goods after Trump takes office - asianews.network

Taiwan — caught between Xi Jinping’s aggressiveness and Donald Trump’s unpredictability - Deccan Herald

Trump Wins Big, Germany’s Coalition Falls—A New Global Order? - Social Europe

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 the war in Ukraine in their first postelection call, a report said - Business Insider

Themes around the World:

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Aviation and airspace disruption

Airlines have suspended or limited services to Tel Aviv and avoided Israeli and nearby airspace during spikes in regional tension. This constrains executive travel and air cargo capacity, pushes shipments to sea/third-country hubs, and complicates time-sensitive logistics.

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Fiscal tightening and tax risk

War-related spending pressures and a higher deficit underpin expectations of fiscal consolidation. IMF recommendations include raising VAT and minimum income tax rates and cutting exemptions, implying higher operating costs, price pass-through challenges, and possible shifts in incentives for investment and hiring.

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E-Auto-Förderung und Autowandel

Die Regierung reaktiviert E-Auto-Subventionen (1.500–6.000 €, ca. 3 Mrd. €, bis zu 800.000 Fahrzeuge). Das stabilisiert Nachfrage, beeinflusst Flottenentscheidungen und Zulieferketten. Gleichzeitig verschärfen EU-Klimaziele und Konkurrenz aus China Preisdruck, Lokalisierung und Technologietransfer-Debatten.

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Semiconductor tariffs and reshoring push

A new 25% tariff on certain advanced semiconductors, alongside ongoing incentives for domestic capacity, is reshaping electronics and AI hardware economics. Firms face higher input costs near-term, while medium-term investment flows shift toward U.S. fabs amid persistent dependence on foreign suppliers.

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Immigration politics and labor supply

Foreign labor is now a core election issue. Japan plans to accept up to 1.23 million workers through FY2028 via revised visas while tightening residence management and enforcement. For employers, this changes hiring pipelines, compliance burdens, and wage/retention competition.

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Investment security screening expands

CFIUS scrutiny and emerging outbound-investment controls increase deal uncertainty in sensitive sectors like semiconductors, AI and advanced manufacturing. Cross-border M&A may require longer timelines, mitigation agreements, or abandonment; investors need earlier national-security due diligence and structural protections.

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TCMB makroihtiyati sıkılaştırma

Merkez Bankası, yabancı para kredilerde 8 haftalık büyüme sınırını %1’den %0,5’e indirdi; kısa vadeli TL dış fonlamada zorunlu karşılıkları artırdı. Finansmana erişim, ticaret kredileri, nakit yönetimi ve yatırım fizibilitesi daha hassas hale geliyor.

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Financial fragmentation and crypto rails

Russia-linked actors are expanding alternative payment channels, including ruble-linked crypto instruments and third-country gateways, while EU/UK target crypto platforms to close circumvention. For businesses, settlement risk rises: blocked transfers, enhanced KYC/AML scrutiny, and sudden counterparty de-risking by banks and exchanges.

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Border and nationalism-related disruptions

Nationalist politics linked to the Cambodia dispute is influencing border policy, including proposals for walls and checkpoint closures. Any tightening can disrupt cross-border trade, trucking, and regional supply chains, while elevating security, insurance, and compliance requirements for logistics operators.

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EU-China EV trade rebalancing

EU’s new ‘price undertaking’ mechanism is reshaping China-made EV flows: VW’s Cupra Tavascan won a tariff waiver by accepting minimum pricing, quotas and EU battery-investment commitments. This creates a template for others, altering sourcing, margins and trade friction.

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Data localization and cross-border transfers

Data security and personal information rules constrain cross-border data transfers, affecting cloud architectures, HR systems, and analytics. Multinationals may need China-specific data stacks, security assessments, and contractual controls, increasing IT spend while limiting global visibility and centralized operations.

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Ports and rail logistics bottlenecks

Transnet’s recovery is uneven: rail volumes are improving, but vandalism and underinvestment keep capacity fragile. Port congestion—such as Cape Town’s fruit-export backlog near R1bn—threatens time-sensitive shipments, raises demurrage, and pushes costly rerouting across supply chains.

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Macroeconomic rebound with fiscal strain

IMF projects Israel could grow about 4.8% in 2026 if the ceasefire holds, driven by delayed consumption and investment. However, war-related debt, defense spending and labor constraints pressure fiscal consolidation, influencing taxation, public procurement priorities, and sovereign risk pricing.

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Energy exports and regional gas deals

Offshore gas production and export infrastructure expansion (Israel–Egypt flows at capacity; Cyprus Aphrodite unitisation talks) underpin regional energy trade. However, operational pauses and political risk can disrupt supply commitments, affecting industrial buyers and energy-intensive sectors.

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Cross-border payments and de-dollarization

Saudi Arabia’s participation in the mBridge multi-CBDC platform (joined 2024) supports faster cross-border settlement; reported cumulative volume exceeds ~$55bn by late-2025, with e-CNY >95% of settlement value. This may broaden currency options and compliance considerations for regional trade financing.

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Digital regulation and data-sovereignty disputes

US concerns over platform fairness rules, network usage fees, and restrictions on exporting high-precision map data (Google) are resurfacing in trade talks. Tighter privacy enforcement after major breaches raises liability, audit, and cross-border data-transfer costs for tech-enabled firms.

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Stablecoins become fiscal tool

US policy is positioning Treasury-backed stablecoins as a new buyer base for short-term bills and a lever of dollar reach. This may shift liquidity from bank deposits, alter credit availability, and create new compliance, treasury, and settlement models for multinationals.

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Sanctions, compliance, crypto enforcement

Ukraine is expanding sanctions against entities and individuals supporting Russia’s defence and financial networks, including crypto payment and mining channels linked to component procurement. This raises counterparty, KYC/AML and re-export control burdens for regional traders and service providers, especially across hubs like UAE and Hong Kong.

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Ports and rail recovery, still fragile

Transnet reports improving port performance and rail volumes rising toward ~168Mt by March 2026, with private operators gaining route access and Durban Pier 2 run privately. However, general freight corridors lag, bottlenecks persist, and service reliability remains a supply-chain constraint.

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Kızıldeniz/Süveyş lojistik şoku

Kızıldeniz güvenlik krizi nedeniyle navlun, sigorta ve teslim süreleri dalgalanıyor; bazı hatlar Afrika çevresine yöneliyor. Türkiye’nin Avrupa-Ortadoğu bağlantılı ihracatında transit süreleri uzayabilir. Envanter, alternatif rota ve çoklu taşıyıcı stratejileri önem kazanıyor.

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Verteidigungsboom und Beschaffung

Deutschlands Aufrüstung beschleunigt Investitionen: über 108 Mrd. € stehen für Modernisierung bereit; zusätzlich 536 Mio. € für loitering munitions, Rahmen bis 4,3 Mrd. €. Chancen entstehen für Zulieferer, Dual-Use-Technologien und IT, aber Exportkontrollen, Compliance und Kapazitätsengpässe nehmen zu.

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Taiwan Strait grey-zone supply shocks

Intensifying PLA and coast-guard activity around Taiwan supports a “quarantine” scenario that could disrupt commercial shipping without open war, raising insurance premiums, rerouting costs, and delivery delays. High exposure sectors include electronics, LNG-dependent manufacturing, and time-sensitive components.

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EU market access and GSP+ scrutiny

Pakistan’s duty-free access under EU GSP+ (extended to 2027) is pivotal for textiles and apparel, but remains linked to 27 conventions and rights monitoring. Any compliance slippage or preference erosion would raise landed costs and disrupt buyer sourcing decisions.

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India–US interim trade reset

A new India–US Interim Agreement framework cuts US tariffs on Indian goods to 18% (from as high as 50%) while India reduces duties on many US industrial and farm goods. Expect shifts in sourcing, pricing, and compliance requirements.

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Regional war and security risk

Gaza conflict and spillovers (Lebanon, Iran proxies) keep Israel’s risk premium elevated, raising insurance, freight, and business-continuity costs. Mobilization and security alerts disrupt staffing and site access, while renewed escalation could rapidly impair ports, aviation, and cross-border trade.

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China overcapacity and de-risking

EU’s goods deficit with China widened to €359.3bn in 2025 as imports rose 6.3% and exports fell 6.5%. German firms weigh deeper China engagement amid IP and security risks, while Beijing’s export controls and subsidised competition threaten EU-based production.

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Suez Canal security normalization

Container lines are cautiously returning to Red Sea/Suez transits after the Gaza ceasefire and reduced Houthi attacks, but reversals remain possible. Canal toll incentives and volatile insurance costs affect routing, freight rates, lead times, and inventory planning.

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Energy security and LNG logistics

PGN began supplying LNG cargoes from Tangguh Papua to the FSRU Jawa Barat, supporting power and industrial demand with distribution capacity up to 100 MMSCFD. Greater LNG reliance improves near-term supply resilience, but exposes users to shipping, price-indexation, and infrastructure bottlenecks.

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Data protection and digital trade pressure

DPDP Act implementation and India–US digital trade commitments may reshape cross-border data transfers, localization expectations, and platform regulation. Multinationals should prepare governance, consent management, breach response, and contract updates amid evolving rules and enforcement.

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Energy trade reroutes to China

Russia’s commodity dependence on China deepens as sanctions intensify; Chinese buying concentrates leverage and affects pricing, payment terms, and political risk. Businesses face heightened China-Russia corridor exposure, including transport bottlenecks, customs scrutiny, and sanctions-adjacent financing risks.

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State asset sales and privatization push

Government signals deeper private-sector role via IPO/asset-sale programs and state ownership policy, highlighted in Davos outreach. Deals such as potential wind-asset sales illustrate momentum. For FDI, opportunity is rising, but governance clarity and equal competition remain key.

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Concessões e PPPs de infraestrutura

O leilão do Aeroporto do Galeão (mínimo de R$ 932 milhões; outorga variável de 20% da receita bruta até 2039) sinaliza continuidade da agenda de concessões, criando oportunidades para operadores e fundos. Porém, reequilíbrios contratuais e intervenção regulatória seguem no radar.

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Tech export controls enforcement surge

Washington is tightening and actively enforcing semiconductor and AI-related export controls, illustrated by a $252m settlement over alleged post-Entity-List tool exports to China’s SMIC. Multinationals face higher compliance costs, licensing delays, and heightened penalties for third‑party diversion.

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Talent constraints and mobility reforms

Persistent shortages in high-skill engineering and digital roles are pushing Taiwan to expand pathways for foreign professionals and longer-term residence. For multinationals, competition for talent will elevate wage pressure, retention costs, and the strategic value of training, automation, and global staffing models.

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Palm oil biofuels and export controls

Indonesia is maintaining B40 biodiesel in 2026 and advancing aviation/bioethanol initiatives, while leadership signaled bans on exporting used cooking oil feedstocks. Policy supports energy security and domestic processing, but can tighten global vegetable oil supply, alter contracts, and increase input-cost volatility.

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Volatilidad macro: moneda e inflación

La depreciación del rial y episodios de inflación elevada distorsionan precios, márgenes y planificación. Empresas enfrentan controles de divisas, dificultades de repatriación, mayor riesgo de impago y costos de importación impredecibles, impulsando dolarización informal y contratos más cortos.