Mission Grey Daily Brief - November 22, 2024

Summary of the Global Situation for Businesses and Investors

The election of Donald Trump as President of the United States has caused uncertainty in Europe and China, with European officials expressing concern about the potential impact on the war in Ukraine and relations with China. In Ukraine, the injury of a North Korean general and the use of an intercontinental missile by Russia have raised tensions, while North Korea and Russia have strengthened their relationship with a tourism drive and missile exchange. Meanwhile, Türkiye's comms chief has called for global cooperation on energy geopolitics, and Vietnam's new digital regulations have raised concerns about the country's business environment.

Donald Trump's Election and its Impact on Europe and China

The election of Donald Trump as President of the United States has caused uncertainty in Europe and China. European officials have expressed concern about the potential impact on the war in Ukraine and relations with China. Trump has repeatedly stated that he could end the conflict in Ukraine in one day, which has prompted fears that he will push for concessions that favour Russian President Vladimir Putin. European leaders are divided on how to respond to the situation, with some criticising German Chancellor Olaf Scholz for calling Putin to negotiate and others suggesting that Europe should move closer to China. However, European officials have stated that they do not want to be dragged into the foreign policy towards China that the new American administration will be engaged in.

Ukraine

In Ukraine, the injury of a North Korean general and the use of an intercontinental missile by Russia have raised tensions in the Russia-Ukraine conflict. The North Korean general, Col Gen Kim Yong Bok, was injured in a Ukrainian strike in Russia's Kursk region, marking the first casualty of a senior North Korean military officer in the escalating conflict. The attack may have targeted a command post used by Russian and North Korean forces, and North Korean troops fighting in Ukraine have been declared fair game and targets by the Ukrainian military. The use of an intercontinental missile by Russia has raised concerns about the potential for a global war, with Poland warning that Russia may be trying to send a message to Ukraine's Western backers.

North Korea and Russia's Strengthened Relationship

North Korea and Russia have strengthened their relationship with a tourism drive and missile exchange. High-level talks in Pyongyang have resulted in an agreement to increase the number of charter flights between the two countries to promote tourism. Additionally, South Korea has stated that Russia supplied air defence missiles to North Korea in exchange for its troops, with North Korea potentially receiving between $320 million to $1.3 billion annually from Russia for sending its troops to Ukraine. This exchange of troops and missiles has raised concerns about the potential impact on the war in Ukraine and the broader geopolitical situation in the region.

Türkiye's Call for Global Cooperation on Energy Geopolitics

Türkiye's comms chief has called for global cooperation on energy geopolitics, highlighting the pivotal role of energy in global geopolitics and the need for international collaboration to tackle growing challenges. The communications director has emphasised the importance of energy in the struggle for global power and the need to address geopolitical crises, regional conflicts, climate change-induced natural disasters, and supply chain disruptions. He has stressed that energy should serve as a tool for regional and global cooperation, not conflict. This call for global cooperation has implications for businesses and investors in the energy sector, as well as those operating in regions affected by geopolitical tensions and energy-related challenges.

Vietnam's New Digital Regulations and their Impact on Business

Vietnam's new digital regulations, which require companies to verify the identities of users and share this information with authorities, have raised concerns about the country's business environment. The regulations echo a cyber identification scheme unveiled by Beijing earlier this year, which was met with international backlash over fears of government overreach, further surveillance, and the erosion of free speech. The regulations come at a precarious time for Vietnam's economy, as the country was seen as a major winner from former US president Donald Trump's trade war with China in his first term. However, success during Trump 2.0 is far from certain, as the president-elect has threatened much wider tariffs on goods from China and elsewhere. The tariffs could cut Vietnam's economic growth by up to 4 percentage points, dealing a devastating blow to the country's growth and potentially threatening business at an especially precarious time.

Themes around the World:

Privatization and PPP Expansion

Saudi Arabia’s new National Privatization Strategy targets over 220 PPP contracts and $64 billion in private investment by 2030. This broadens opportunities for foreign investors in infrastructure, transport, water, and health, while increasing private sector participation and competition.

Polarization in Export Competitiveness

While semiconductors and automobiles drive export growth, sectors like steel and machinery face declining global competitiveness due to Chinese competition and EU carbon border measures. This polarization requires targeted innovation and adaptation strategies for affected industries.

US Investment Climate and Workforce Scrutiny

High-profile enforcement actions, such as the ICE raid on a Korean battery plant, highlight increased scrutiny of foreign investment and workforce compliance in the US. This environment raises operational risks for international investors and may affect FDI inflows and project execution timelines.

Administrative Delays and Bureaucratic Risks

The rapid rollout of new shelter regulations has strained local planning offices, causing project approval delays. This increases operational risk for developers and international investors, with potential for missed deadlines and higher holding costs.

International ‘Board of Peace’ Governance Experiment

The US-led ‘Board of Peace’—involving multiple global actors—aims to oversee Gaza’s reconstruction and security. Israel’s recent agreement to participate marks a policy shift. However, questions over legitimacy, authority, and buy-in from Palestinians and Hamas create operational and reputational risks for international businesses.

US-China Trade and Tariff Policy

The US maintains high tariffs on Chinese goods, with ongoing trade tensions and periodic truce agreements. Recent deals have reduced some tariffs, but policy uncertainty remains high, impacting global supply chains and prompting businesses to diversify sourcing and production.

Oil Revenue Losses and Export Risks

Sanctions and payment repatriation issues have resulted in Iran losing up to 38% of its oil revenue, with only $13 billion of $21 billion received. Protests and instability threaten further disruption to Iran’s 2% share of global oil exports.

US-China Trade Realignment Intensifies

US-China trade contracted sharply in 2025, with US imports from China down 28% and exports down 38%. Southeast Asia gained market share, reflecting a global supply chain shift. Ongoing tariffs and legal challenges create uncertainty for international business planning.

Green Transformation and Regulatory Burden

Germany’s ambitious green policies have increased regulatory complexity and compliance costs for businesses. While supporting climate goals, these measures contribute to capital flight, slower investment, and concerns about overregulation, particularly for small and medium-sized enterprises.

Persistent Energy and Power Constraints

South Africa continues to face chronic electricity shortages and grid instability, impacting industrial output and investor confidence. Despite some renewable energy progress, reliance on coal and delays in infrastructure upgrades create ongoing risks for manufacturing, mining, and supply chains.

Political Instability and Investment Uncertainty

France faces heightened political volatility following snap elections and a hung parliament, with far-right gains and government survival dependent on fragile coalitions. This instability is dampening investor confidence, delaying investment decisions, and complicating the business environment for both domestic and foreign firms.

Critical Infrastructure and Cyber Resilience

Taiwan faces a surge in cyberattacks, particularly targeting energy, emergency, and healthcare infrastructure. The government’s national cybersecurity strategy aims to bolster resilience, but persistent threats from state and non-state actors require ongoing investment and robust risk management.

Semiconductor Supply Chain Realignment

A landmark US-Taiwan trade deal commits at least $250 billion in Taiwanese semiconductor investment in the US, aiming to relocate up to 40% of Taiwan’s chip supply chain. This reshapes global tech supply chains and impacts Taiwan’s strategic leverage.

Critical Minerals Strategy Reshapes Trade

Australia's $1.2 billion Critical Minerals Reserve prioritizes antimony, gallium, and rare earths, aiming to secure supply chains and attract investment. This government-backed push is vital for global electronics, defense, and clean energy sectors, impacting international partnerships and supply security.

Automotive Sector Faces Major Headwinds

The German automotive industry, highly reliant on US exports and global supply chains, is acutely exposed to new tariffs and trade uncertainty. Stock declines of 3-5% for major automakers reflect investor anxiety, while potential cost increases, investment delays, and supply chain disruptions threaten profitability and employment.

Massive Western Financial and Security Aid

The EU approved a €90 billion loan and the US is negotiating an $800 billion postwar recovery package for Ukraine. These funds, tied to reforms and military needs, are vital for budget stability, reconstruction, and investor confidence, but are contingent on ongoing anti-corruption efforts.

CUSMA Renegotiation and Trade Bloc Realignment

With Canada’s exports to the U.S. at a 30-year low, the upcoming CUSMA renegotiation is pivotal. Outcomes could range from a complete overhaul to no agreement, pushing Canada to accelerate trade diversification with the EU, Asia, and the Global South, impacting long-term investment strategies and supply chain resilience.

Arctic Geopolitics and Resource Competition

Greenland’s vast mineral reserves, especially rare earths, are increasingly accessible due to climate change, attracting global interest. Strategic competition among the US, EU, Russia, and China over Arctic resources and routes directly impacts trade, investment, and supply chain strategies.

Intensified Technology Export Controls

China is strengthening legal frameworks and oversight on technology exports, particularly in AI, semiconductors, and rare metals. Tighter reviews and restrictions on foreign acquisitions and technology transfers reflect Beijing’s focus on national security and self-reliance, impacting cross-border investment and innovation flows.

Stricter Migration and Student Visa Policies

Australia has moved India, Nepal, Bangladesh, and Bhutan to the highest-risk category for student visas, increasing scrutiny and documentation requirements. This policy shift affects international education revenues, skilled migration pipelines, and labor market flexibility, especially in sectors reliant on foreign talent.

Disrupted Agricultural and Export Supply Chains

Ukraine’s agricultural sector remains a linchpin of global food security, but logistics have been repeatedly restructured due to war. Attacks on infrastructure and shifting export routes create volatility in grain and commodity markets, impacting international buyers and supply chain resilience.

Tariff Policy and Global Trade Uncertainty

The US continues to use tariffs as a central economic tool, reducing its trade deficit but creating market uncertainty and diplomatic friction. Tariff adjustments have altered trade flows, increased costs, and complicated supply chain planning for international businesses operating in or with the US.

Organized Crime and Investment Risk

Persistent organized crime and cartel activity, especially in key states like Michoacán, continue to pose operational and security risks. Despite increased arrests and bilateral cooperation, extortion, violence, and supply chain disruptions remain significant concerns for international investors.

Persistent Attacks on Energy Infrastructure

Russian strikes on Ukrainian energy assets have caused widespread blackouts, affecting millions and disrupting industrial, transport, and municipal operations. These attacks threaten supply chains, increase operational risks, and require urgent investment in resilient infrastructure.

Regulatory Modernization and Investment Climate

Recent reforms, including streamlined mining licenses, improved investor protections, and digital property platforms, are enhancing Saudi Arabia’s regulatory environment. These measures aim to reduce red tape, increase transparency, and attract long-term international investment across sectors, though implementation and policy stability are closely watched by global investors.

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.

Major Infrastructure and Logistics Expansion

Record infrastructure investment, especially in transport and logistics, is transforming states like Uttar Pradesh and Madhya Pradesh into key hubs. Platforms like PRAGATI enable efficient project execution, reducing bottlenecks and enhancing India’s competitiveness as a manufacturing and export base.

Infrastructure Expansion and Investment Bottlenecks

Vietnam is launching large-scale infrastructure projects, targeting $5.5 billion in foreign loans for 2026 and up to $38 billion by 2030. However, persistent disbursement delays, land clearance, and regulatory hurdles threaten timely execution, impacting business operations and foreign investment flows.

Sanctions-Driven Economic Contraction

Years of sanctions, renewed UN measures, and loss of foreign investment have led to near-stagnant GDP growth (0.6% in 2025), technological lag, and rising poverty. Structural reforms are absent, worsening the long-term outlook for international business engagement.

Critical Minerals and Battery Supply Chains

Major investments in domestic lithium refining and battery materials, backed by the Canada Growth Fund, BMW, and Breakthrough Energy, aim to secure Canada’s role in the global EV supply chain. These efforts reduce reliance on overseas processing and support North American clean energy ambitions.

Persistent Dependence on China Trade

Despite diversification efforts, China remains Germany’s largest trading partner, with bilateral trade at $287 billion in 2024-25. This dependence exposes German businesses to geopolitical risks and supply chain vulnerabilities, complicating efforts to realign trade and investment strategies.

Regional Diplomacy and Trade Policy Uncertainty

Israel’s diplomatic maneuvering—balancing US, Egyptian, and broader regional interests—creates a fluid trade policy environment. Ongoing negotiations over border management, reconstruction, and security arrangements introduce unpredictability for cross-border trade, investment flows, and multinational business strategies.

Supply Chain Resilience and Critical Technologies

Recent Indo-German agreements emphasize collaboration on semiconductors, critical minerals, and digital technologies. These initiatives aim to secure supply chains, foster joint R&D, and support Industry 4.0, reflecting Germany’s strategic response to global disruptions and technological competition.

Legally Binding Security Guarantees

Ukraine’s allies have agreed to activate robust, legally binding security guarantees after a ceasefire, including military aid, multinational force deployment, and US-led monitoring. These measures aim to deter future Russian aggression and stabilize Ukraine’s business environment.

Geopolitical Tensions Drive Market Volatility

Escalating US-China rivalry, sanctions on Russia, and US military actions in Venezuela have heightened global risk aversion. These developments have triggered capital flight from emerging markets, increased currency volatility, and led to sharp corrections in equity markets, particularly in India, affecting global investment strategies.

Widespread Civil Unrest and Political Instability

Nationwide protests over economic collapse and political repression have resulted in hundreds of deaths and thousands of arrests. The instability has led to internet shutdowns and business disruptions, significantly raising operational and security risks for foreign firms.