Mission Grey Daily Brief - November 30, 2024

Summary of the Global Situation for Businesses and Investors

The Russia-Ukraine war continues to escalate, with Russian attacks on Ukrainian energy infrastructure and civilian targets causing widespread power outages and damage to homes and businesses. Donald Trump's election victory and potential role in brokering a peace deal have raised hopes for a resolution, but also concerns about the terms of any agreement. Meanwhile, Trump's tariff threats against Canada and China have caused market jitters and prompted companies to adjust their strategies. In other news, Sweden has asked China to cooperate in an investigation into the rupture of two data cables in the Baltic Sea, and Taiwan's President Lai Ching-te's planned stopover in Hawaii and Guam has angered Beijing.

Russia-Ukraine War Escalates

The Russia-Ukraine war has intensified, with Russian forces targeting Ukrainian energy infrastructure and civilian areas. Russian President Vladimir Putin has threatened to attack decision-making centres in Kyiv with a new ballistic missile, Oreshnik. Ukrainian President Volodymyr Zelensky has pledged a tough response to any "Russian blackmail", and criticised the use of cluster munitions against civilians.

The latest attack on Thursday involved over 200 missiles and drones, knocking out power for more than a million households. Ukrainian officials have implemented emergency power outages nationwide to minimise overloads to the country's grid. Russia's attacks on civilian infrastructure are likely to continue and escalate as winter sets in, aiming to sap Ukrainian strength and morale.

Donald Trump's election victory and potential role in brokering a peace deal have raised hopes for a resolution, but also concerns about the terms of any agreement. Trump's nominee for special envoy for Ukraine and Russia, Keith Kellogg, has proposed freezing the battle lines and forcing Kyiv and Moscow to negotiate, with NATO membership for Ukraine off the table. Critics argue that this approach may not work, given the widespread differences between the two sides.

Trump's Tariff Threats Cause Market Jitters

Donald Trump's tariff threats against Canada and China have caused market jitters and prompted companies to adjust their strategies. Trump has threatened to levy 25% tariffs on all goods entering the U.S. from Canada and Mexico, unless they meet his demands on the border. This has sent politicians and industry players scrambling, as Canada's largest trading partner is the U.S.

Trump has also threatened to impose higher tariffs on Chinese imports, blaming Beijing for the flow of fentanyl into the U.S. China has criticised the tariff threats as ineffective and unjustified, and markets have reacted cautiously. Some U.S. companies are front-loading imports to avoid higher tariffs, while Chinese manufacturers are diversifying their operations to manage concentration risks.

Sweden Asks China to Cooperate in Baltic Sea Cable Investigation

Sweden has formally asked China to cooperate in an investigation into the rupture of two data cables in the Baltic Sea, in an area where a China-flagged vessel was sighted. The two cables, one running from Finland to Germany and the other from Lithuania to Sweden, were damaged in Swedish waters last week. Swedish Prime Minister Ulf Kristersson has requested that the vessel move to Swedish waters for inspection and cooperate with Swedish authorities in the ongoing investigation.

Finnish, Swedish, and German authorities have launched investigations into the rupture of the cables, with Germany's defense minister suggesting that the damage was caused by sabotage. Chinese authorities have stated that they have no information about the ship but are ready to maintain communication with relevant parties.

Taiwan-China Tensions Escalate Over President Lai's Stopover in Hawaii and Guam

Taiwan's President Lai Ching-te's planned stopover in Hawaii and the U.S. territory of Guam during a trip to three Pacific island nations has angered Beijing. China insists that democratic self-ruled Taiwan is part of its territory and opposes any international recognition of the island. Chinese officials have vowed to "resolutely crush" any attempts for Taiwan independence.

Lai's trip will be his first overseas since taking office in May, and he will meet with "old friends" and "think tank members" during his two-night stay in Hawaii and one-night stay in Guam. Tensions between China and Taiwan have escalated since Lai took office, with China ramping up military activity around Taiwan to pressure Taipei into accepting its claims of sovereignty.