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
Trump Wins Big, Germany’s Coalition Falls—A New Global Order? - Social Europe
Themes around the World:
LNG buildout and Asian markets
Canadian LNG export capacity is advancing through projects such as LNG Canada and Cedar LNG, with long-term supply contracts emerging. This supports upstream and midstream investment, but depends on regulatory certainty, Indigenous agreements, and global LNG pricing.
AI governance in retail finance
FCA’s call for input on AI’s long-term impact to 2030 signals reliance on outcome-based frameworks rather than new rules. Online investing firms must prove model governance, explainability and third‑party controls to deploy AI in advice, nudging and surveillance.
Industrial zones and SCZONE expansion
The Suez Canal Economic Zone continues upgrading ports and terminals (including new container-handling capacity), positioning Egypt for nearshoring and regional distribution. Benefits include improved clearance and industrial clustering, but investors must assess land allocation terms, utility reliability, and FX-linked input costs.
Arbeitskräfteknappheit und Migration
Demografie verschärft den Fachkräftemangel. 2025 waren rund 46 Mio. Menschen erwerbstätig; Beschäftigungswachstum kommt laut BA nur noch von Ausländern, deren Anteil stieg auf 17%. Gleichzeitig bleiben Visaprozesse bürokratisch. Das beeinflusst Standortentscheidungen, Lohnkosten und Projektlaufzeiten.
Rail logistics reforms and PPPs
Freight rail and ports are opening cautiously to private operators, with Transnet conditionally allocating slots to 11 operators and targeting 250Mt by 2030. However, stalled legislation and unresolved third-party access tariffs keep exporters exposed to bottlenecks, demurrage, and modal shift costs.
US interim trade reset
A new US–India interim framework cuts peak US tariffs to ~18% on many Indian goods, with some lines moving to zero, while India lowers duties on US industrial and select farm products. Expect near-term export uplift but ongoing uncertainty around Section 232 outcomes.
Energy export squeeze and rerouting
Proposed EU maritime-services bans for Russian crude and tighter LNG tanker/icebreaker maintenance restrictions aim to cut export capacity and revenues (oil and gas revenues reportedly down about 24% in 2025). Buyers rely more on discounted, high-friction routes via India, China, and Türkiye.
Carbon pricing and green finance ramp
Thailand is building carbon-market infrastructure: cabinet cleared carbon credits/allowances as TFEX derivatives references, while IEAT secured a US$100m World Bank-backed program targeting 2.33m tonnes CO2 cuts and premium credits. Exporters gain CBAM hedges, but MRV and reporting burdens rise.
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.
Secondary tariffs and sanctions extraterritoriality
Washington is expanding secondary measures, including tariffs on countries trading with Iran and pressure on partners over Russia-linked commerce. This raises third-country compliance burdens, increases tracing requirements across multi-tier supply chains, and elevates retaliation and WTO-dispute risks for multinationals.
EV battery downstream investment surge
Government-backed and foreign-led projects are accelerating integrated battery chains from mining to precursor, cathode, cells and recycling, including a US$7–8bn (Rp117–134tn) 20GW ecosystem. Opportunities are large, but localization, licensing, and offtake qualification requirements are rising.
Export target amid protectionism
Vietnam is targeting US$546–550bn exports in 2026 (+15–16% vs 2025’s record US$475bn), but faces rising protectionism, stricter standards, and dependence on foreign-invested manufacturing and imported inputs—raising compliance, sourcing, and margin risks for exporters.
Supply chain realignment and friend-shoring
U.S. economic security doctrine is reinforcing regionalization and ‘friend-shoring,’ influencing sourcing, logistics hubs, and capital flows toward allied jurisdictions. Companies are adopting dual supply chains, higher inventory buffers, and geopolitical risk premiums, raising costs but improving resilience.
Fiscal outlook and debt path
Brazil’s primary deficit was R$61.7bn in 2025 (0.48% of GDP), while gross debt ended near 79.3% of GDP and is projected higher. Fiscal rules rely on exclusions, raising risk premiums, FX volatility and financing costs for investors and importers.
Minerais críticos e competição geopolítica
EUA e UE intensificam acordos para grafite, níquel, nióbio e terras raras; a Serra Verde recebeu financiamento dos EUA de US$ 565 milhões. Oportunidades em mineração e refino convivem com exigências ESG, licenciamento e risco de dependência de compradores.
Strike disruptions across logistics
A renewed strike cycle is hitting transport and services: Lufthansa cancellations reached ~800 flights affecting ~100,000 passengers, while further rail and public‑sector actions are possible from March. Recurrent stoppages raise lead times, logistics costs and contingency needs.
Semiconductor supercycle and capacity
AI-driven memory demand is lifting Samsung Electronics and SK hynix earnings and prompting large 2026 capex. Tight supply and sharply rising DRAM contract prices could raise input costs for global electronics, while boosting Korea’s export revenues and supplier investment opportunities across equipment and materials.
AI regulation and compliance burden
China is expanding AI governance via draft laws and sector rules, emphasizing safety, content controls, and data governance. Foreign firms deploying AI or integrating Chinese models face product localization, auditability demands, and higher legal exposure around censorship and algorithm accountability.
Rial collapse, high inflation
The rial’s rapid depreciation to around 1.5–1.6 million per USD and inflation near 50% are destabilizing pricing, wages, and import capacity. Multiple exchange rates and subsidy changes amplify settlement risk, impair demand forecasting, and complicate repatriation and local sourcing.
Industriekrise und Exportdruck
Deutschlands Wachstum bleibt schwach (2025: +0,2%; Prognose 2026: +1,0%), während die Industrie weiter schrumpft. US-Zölle und stärkere Konkurrenz aus China belasten Exporte und Margen; Investitionen verlagern sich, Lieferketten werden neu ausgerichtet und Kosten steigen.
Secondary Sanctions via Tariffs
Washington is expanding coercive tools beyond classic sanctions, including threats of blanket tariffs on countries trading with Iran. For multinationals, this elevates third-country exposure, drives deeper counterparty screening, and can force rapid rerouting of trade, logistics, and energy procurement.
Regional security, Hormuz risk
Military build-ups and tit-for-tat maritime actions heighten disruption risk around the Strait of Hormuz, a corridor for roughly one-fifth of seaborne oil. Any escalation could delay shipping, spike premiums, and force rerouting, affecting chemicals, commodities, and container traffic.
Escalating tariffs and legal risk
Wide-ranging import tariffs—especially on China—are lifting input costs and retail prices, while Supreme Court review of IEEPA authorities adds reversal risk. Companies should stress-test pricing, customs bonds, and contract clauses for sudden duty changes.
Import licensing and quota uncertainty
Businesses report delays and sharp quota cuts in import permits (e.g., frozen beef private quota cut from 180,000 to 30,000 tons), alongside tighter controls on fuel import quotas for private retailers. This heightens operational uncertainty for food, hospitality, and downstream distribution networks.
Reconfiguración automotriz y China
Cierres y reestructuraciones abren espacio a fabricantes chinos. BYD y Geely buscan comprar la planta Nissan‑Mercedes (230.000 unidades/año) mientras México intenta aplazar inversiones chinas para no tensionar negociaciones con EE. UU.; impactos en cadenas regionales y compliance de origen.
Disinflation and tight monetary policy
Annual inflation eased to 30.65% in January, but monthly CPI jumped 4.8%, underscoring sticky services and food risks. The central bank projects 2026 inflation at 15–21% and maintains a cautious stance, affecting credit costs, pricing, and demand planning.
Supply-chain de-risking beyond China
Taipei is accelerating economic resilience by diversifying export markets and technology partnerships beyond China, including deeper U.S. and European engagement. This shifts rules-of-origin, compliance expectations, and supplier qualification timelines, especially for electronics, telecoms and machinery exporters.
Industrial digital twins for energy
Finland’s energy-transition projects and grid investments are increasing uptake of simulation for power systems, heating networks and decarbonization planning. This supports consulting and software exports, but also elevates requirements for data quality, model validation, and regulatory-aligned reporting.
Monetary easing amid weak growth
Bank of England is holding Bank Rate at 3.75% after a narrow 5–4 vote, but signals likely cuts from spring as inflation trends toward 2%. Shifting rate expectations affect GBP, financing costs, valuations, and hedging for UK-linked trade.
Rail connectivity and cross-border links
Saudi Railways moved 30m tonnes freight in 2025 and 14m passengers, displacing ~2m truck trips and cutting 364k tonnes emissions. New rolling-stock deals and the approved Riyadh–Doha high-speed rail deepen regional connectivity for labour, tourism, and time-sensitive cargo.
Regulatory squeeze on stablecoin yields
US negotiations over banning stablecoin ‘interest’ or ‘rewards’ could reshape business models and market liquidity. Restrictions may push activity offshore or into bank-issued tokens, altering payment costs, on-chain treasury management, and vendor settlement options for global commerce.
Digital regulation and platform compliance risk
Proposed online-platform and network rules, plus high-profile cases involving major platforms, are viewed in Washington as discriminatory. Potential policy shifts could alter data governance, content delivery costs, and competition enforcement, influencing market entry strategy and compliance budgets for multinationals.
Patchwork U.S. AI and privacy regulation
State-led AI governance and privacy rules are expanding in 2026, adding transparency, bias testing, provenance, and reporting requirements. Multinationals face fragmented compliance across jurisdictions, higher litigation risk, and new constraints on cross-border data and HR automation.
Black Sea corridor shipping fragility
The maritime corridor carries over 90% of agricultural exports, but repeated strikes on ports and logistics cut shipments by 20–30%, leaving a 10 million‑tonne grain surplus. Businesses face volatile freight rates, schedule unreliability, cargo security exposure, and alternative routing costs.
Fiscal pressure and project sequencing
Lower oil prices and reduced Aramco distributions are tightening fiscal space, raising the likelihood of project delays, re-scoping and more PPP-style financing. International contractors and suppliers should plan for slower award cycles, tougher payment terms, and higher counterparty diligence.
Immobilien-, Bau- und Projektpipeline-Risiko
Hohe Finanzierungskosten bremsen Bau und Real Estate: Hypothekenzinsen lagen Ende 2025 bei ca. 3,9% (10 Jahre), Neubaufinanzierungen schwächer. Der Bau-PMI fiel Januar 2026 auf 44,7. Auswirkungen: Standortverfügbarkeit, Werks-/Logistikflächenpreise, Lieferantenaufträge und Investitions-Timings.