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Mission Grey Daily Brief - December 11, 2024

Summary of the Global Situation for Businesses and Investors

The fall of the Assad regime in Syria has sent shockwaves across the Middle East, with Israel and Turkey striking Syrian military targets and rebels drawing up a hit list of Assad regime officials. The rebel group HTS, now in power in Syria, has been on the U.S. list of terrorist groups since 2012, complicating the U.S.'s ability to work with the new government. Meanwhile, a militia fighting on behalf of the Buddhist Rakhine minority group has driven Myanmar's army out of its last outpost along the country's 168-mile border with Bangladesh. In Iran, officials have closed schools and government offices due to dangerous levels of air pollution. Canada is facing the prospect of a tariff war with the U.S., with President-elect Donald Trump threatening to impose tariffs on most trade partners. Russia's ongoing conflict with the West and escalating tensions with NATO raise concerns about a potential large-scale war.

Syria's Political Upheaval and Regional Implications

The fall of the Assad regime in Syria has sent shockwaves across the Middle East, with Israel and Turkey striking Syrian military targets and rebels drawing up a hit list of Assad regime officials. The rebel group HTS, now in power in Syria, has been on the U.S. list of terrorist groups since 2012, complicating the U.S.'s ability to work with the new government. The rapid demise of two pivotal elements in Iran's "axis of resistance"—the Assad regime and Hezbollah leader Hassan Nasrallah—has thrown the region into turmoil. Iran's massive investments in Syria, including oil infrastructure and telecommunications, have effectively vanished, and the fall of Assad disrupts critical trade routes and access to Mediterranean ports, further straining Iran's battered economy. The rapid and overwhelming advance of the militia alliance led by HTS, a former al-Qaida affiliate, marks a generational shift in the Middle East's political landscape. However, the rebel alliance has yet to outline its vision for Syria's future, leaving uncertainty in a region with no established framework for such a transition.

Myanmar's Border Conflict and Regional Stability

In Myanmar, a militia fighting on behalf of the Buddhist Rakhine minority group has driven Myanmar's army out of its last outpost along the country's 168-mile border with Bangladesh. The rebel group now claims control of the northern part of Rakhine state, where locals have pushed for independence. This development raises concerns about regional stability and the potential for further conflict along the border. The situation highlights the ongoing tensions between the central government and minority groups in Myanmar, and the potential for these tensions to escalate into armed conflict.

Iran's Air Pollution Crisis and Societal Impact

In Iran, officials have closed schools and government offices due to dangerous levels of air pollution. This crisis has forced schools to move classes online and disrupted the daily lives of millions of Iranians. The situation highlights the urgent need for environmental reforms and sustainable development in Iran, as well as the potential for social unrest and health issues due to the pollution. The crisis also underscores the broader challenges facing Iran, including economic struggles and regional instability.

Canada-U.S. Trade Tensions and Economic Impact

Canada is facing the prospect of a tariff war with the U.S., with President-elect Donald Trump threatening to impose tariffs on most trade partners. A Bloomberg analysis found that these tariffs would have wildly different effects on various countries, with Canada being a certain victim due to its reliance on the U.S. consumer market. The analysis predicts that Canada's net exports would decline by a third under a 20-per-cent U.S. tariff, which would have a profound impact on Canada's economy and well-being. This situation underscores the risks associated with Canada's underpopulation, which has limited the country's ability to create new businesses and compete in the global market. The potential for a tariff war also highlights the importance of diversifying trade partnerships and strengthening domestic markets to mitigate the impact of external shocks.


Further Reading:

Hard Numbers: Tehran’s pollution closes schools, Social media swing vote, Militia controls Myanmar-Bangladesh border, Signs of Assad-era torture, Big boost for Ukraine - GZERO Media

In Lebanon, many hail Assad downfall as Syrian refugees stream home - Al-Monitor

Justin Trudeau suggests Canada will retaliate against Donald Trump’s tariffs - Toronto Star

Newspaper headlines: Israel 'sinks navy' in Syria and Rayner to force through jail plans - BBC.com

Opinion: Trump’s threats should remind us of Canada’s underpopulation risk - The Globe and Mail

Rebels seized control of Syrian capital. And, Trump's 1st post-election TV interview - NPR

Sri Lanka, Bangladesh and now Syria: Could Iran be the next? - The Times of India

The fall of Syria's Assad has renewed hope for the release of U.S. journalist Austin Tice - NPR

The west is already at war with Russia. And large-scale conflict may not be far off - The Conversation

Themes around the World:

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Advanced chip reshoring accelerates

TSMC’s plan to mass-produce 3nm chips in Kumamoto, reportedly around US$17bn investment with added Japanese subsidies, deepens local supply. It strengthens Japan’s AI/auto ecosystems, but intensifies competition for talent, power, and water infrastructure.

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China coercion, economic security

Rising China–Japan tensions are translating into economic-security policy: tighter protection of critical goods, dual-use trade and supply-chain “China-proofing.” Beijing’s reported curbs (seafood, dual-use) highlight escalation risk that can disrupt exports, licensing, and China-linked operations.

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Automotive transition and investment flight

VDA reports 72% of 124 suppliers are delaying, cutting or relocating German investment; employment fell from 833k (2019) to 726k (2025). EV incentives may depress used values and dealer margins, while CO₂-rule uncertainty complicates capex and sourcing decisions.

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Renewed US tariff escalation risk

Washington signals possible reversion to 25% tariffs, tying relief to South Korea’s $350bn US-investment pledge and progress on “non‑tariff barriers.” Uncertainty raises landed costs and disrupts pricing, contract terms, and US-facing automotive, pharma, and biotech supply chains.

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Transactional deal-making with allies

Washington is increasingly using tariff threats to extract investment and market-access commitments from partners, affecting sectors like autos, pharma, and lumber. Businesses should anticipate rapid policy shifts tied to negotiations, with material implications for location decisions, sourcing, and pricing in key allied markets.

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Fiscal stimulus mandate reshapes markets

The ruling coalition’s landslide win supports proactive stimulus and strategic spending while markets watch debt sustainability. Equity tailwinds may favor exporters and strategic industries, but bond-yield sensitivity can tighten financial conditions and affect infrastructure, PPP, and procurement pipelines.

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EIB Lending Returns, Project Pipeline

The gradual resumption of European Investment Bank operations—reported with €200m earmarked for renewable energy—signals improving European financing access. This can catalyze infrastructure, green industrial upgrades and supplier capacity expansion, while raising compliance expectations on procurement, ESG and governance standards.

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‘Made in Europe’ Strategy Debated

France champions the EU’s ‘Made in Europe’ industrial strategy to counter Chinese imports and strengthen supply chains. Internal EU divisions over protectionism versus openness create uncertainty for multinational firms, affecting procurement, investment, and market access decisions.

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US-Canada Trade Tensions Escalate

The US has threatened 100% tariffs on Canadian exports if Canada deepens trade with China, creating significant uncertainty for supply chains, cross-border investment, and the upcoming USMCA renegotiation. This volatility directly impacts market access and business planning for international firms.

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China’s Strategic Export Controls

China has expanded export controls on critical minerals and technology, targeting entire supply chains. These measures, often ambiguous and reactive, create uncertainty for global manufacturers and heighten the risk of supply disruptions in sectors such as electronics, EVs, and renewable energy.

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Сжатие азиатского спроса на нефть

Риски сокращения импорта Индией и санкционное давление увеличивают скидки на российскую нефть: дисконты ESPO к Brent около $9/барр., Urals — ~$12, а поставки в Индию падали до ~1,3 млн барр./сут. Россия сильнее зависит от Китая.

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Capacity constraints and productivity ceiling

Business surveys show utilisation still elevated (around 83%+), signalling tight capacity and lingering cost pressures. Without productivity gains, growth can translate into inflation and wage pressures, affecting project timelines, construction costs, and the reliability of domestic suppliers for global value chains.

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Russia-China Strategic Economic Partnership

Over $100 billion in joint projects with China span minerals, transport, and military technology. China supplies critical components and payment systems, helping Russia bypass sanctions. This deepening partnership shifts Russia’s trade orientation and impacts global supply chains and investment flows.

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Port and rail congestion capacity limits

Chronic congestion risks at the Port of Vancouver and inland rail corridors continue to threaten inventory reliability and ocean freight dwell times. Capacity expansions (e.g., terminal upgrades and Roberts Bank proposals) are slow, so importers should diversify gateways and build buffer stock.

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Tech export controls to China

Washington is tightening licensing and end-use monitoring for advanced AI chips and semiconductor tools destined for China, with strict Know-Your-Customer and verification terms. This elevates compliance costs, constrains China revenue, and accelerates supply-chain bifurcation in tech.

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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.

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Disaster and BCP-driven supply chains

Japan’s exposure to earthquakes and extreme weather is pushing stricter business-continuity planning and inventory strategies. Companies are investing in automated, earthquake-resilient logistics hubs and longer lead-time services to dampen disruption risk, affecting warehousing footprints, insurance costs, and supplier qualification.

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Logistics build-out and trade corridors

Ports and inland logistics are expanding, including new logistics zones and rail growth supporting freight and mining flows. Saudi Railways moved ~30m tons of freight in 2025, reducing trucking dependence. Improves supply-chain resilience, but project phasing and permitting remain execution risks.

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BRICS payments push sanctions exposure

Brazil’s joint statement with Russia criticising unilateral sanctions and promoting local-currency settlement comes as bilateral trade reached US$10.9bn in 2025. Firms must strengthen sanctions screening, banking counterparties and shipping/insurance checks to avoid secondary-sanctions and compliance disruptions.

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Central bank independence concerns, rupiah

Parliament confirmed President Prabowo’s nephew to Bank Indonesia’s board after rupiah hit a record low near 16,985/USD. Perceived politicization can raise risk premia, FX hedging costs, and volatility for importers, exporters, and foreign investors pricing IDR exposure and local debt.

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Competition regime reforms reshape deal risk

Government plans to make CMA processes faster and more predictable, with reviews of existing market remedies and merger control certainty. This could reduce regulatory delay for transactions, but also changes strategy for market-entry, pricing conduct, and consolidation across regulated sectors.

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Shadow-fleet oil trade disruption

Iran’s crude exports rely on a mature “dark fleet” using AIS spoofing, ship-to-ship transfers and transshipment hubs (notably Malaysia) to reach China at discounts. Expanded interdictions and tanker seizures increase freight, insurance, and contract-frustration risks for energy-linked supply chains.

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Structural Economic Challenges and Reform Agenda

Thailand faces its lowest economic growth in a decade, driven by high household debt, corruption, and an aging workforce. Political parties are prioritizing SME support, anti-corruption, digital infrastructure, and EEC revitalization, but structural reforms remain critical for sustainable long-term growth.

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Critical minerals and battery supply chains

Canada is positioning itself as a “trusted supplier” of critical minerals, supporting mining, processing and battery ecosystems. This creates opportunities in offtakes and JV processing, but permitting timelines, Indigenous consultation, and infrastructure constraints can delay projects and cashflows.

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Energy Geopolitics and Trade Deals

U.S. trade negotiations increasingly bundle energy commitments and geopolitical conditions, as seen in tariff relief tied to partners’ changes in Russian oil purchases. This links market access to energy sourcing, complicating procurement strategies and increasing political risk in long-term offtake contracts.

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Regulatory reset and supervisory tightening

US policymakers are reconsidering post-2023 oversight, including “tailored” rules for community banks and changes to examination practices. Regulatory uncertainty complicates strategic planning for foreign entrants, increases compliance variability across charters, and may accelerate risk-based repricing of credit.

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Hormuz maritime security volatility

Escalating U.S.–Iran tensions include tanker seizures and discussion of maritime interdictions. Any incident near the Strait of Hormuz can spike energy prices, delay shipments, and raise war-risk premiums. Businesses should stress-test logistics, bunker costs, and force-majeure exposures.

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China-linked FDI rules re-evaluation

India is reviewing Press Note 3 and may add a de minimis threshold to speed small-border-country investments while retaining scrutiny for sensitive sectors. This could reopen selective China capital and supplier participation, affecting JV structuring, procurement costs, and compliance with security reviews.

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Security, vandalism and criminality risks

Persistent cable theft and rail vandalism raise insurance, security and maintenance costs and deter private participation in logistics. Broader crime elevates risk for warehousing, trucking and staff mobility, requiring fortified facilities, vetted contractors and robust business-continuity planning.

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Infraestrutura portuária e concessões

Portos movimentaram recorde de 1,4 bilhão de toneladas em 2025 (+6,1%), com contêineres +7,2%. Leilões e autorizações somaram investimentos bilionários. Para comércio exterior, melhora capacidade e reduz gargalos, mas exige gestão de tarifas, regulação e SLAs logísticos.

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Saudization and workforce constraints

Saudi Arabia is tightening localization rules, restricting expatriates from certain senior and commercial roles and raising Saudization ratios in sales/marketing. Multinationals must redesign org charts, compensation, and compliance processes, increasing operating costs and talent-transition risk.

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Security and Organized Crime Risks

Persistent insecurity, including theft and extortion, remains a top obstacle for business operations. Nearly half of Mexican firms report crime victimization, leading to higher security costs and operational risks, particularly in key industrial regions outside secure zones like Coahuila.

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Forced-labor import enforcement intensifies

CBP enforcement under the Uyghur Forced Labor Prevention Act continues to drive detentions and documentation demands, increasingly affecting complex goods. Companies need deeper tier-n traceability, auditable supplier evidence, and contingency inventory planning to avoid port holds and write-offs.

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استقرار النقد والتضخم والسياسة النقدية

الاحتياطيات سجلت نحو 52.59 مليار دولار بنهاية يناير 2026، مع تباطؤ التضخم إلى قرابة 10–12% واتجاه البنك المركزي لخفض الفائدة 100 نقطة أساس. تحسن الاستقرار يدعم الاستيراد والتمويل، لكن التضخم الشهري المتذبذب يبقي مخاطر التسعير والأجور مرتفعة.

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Infrastructure Modernization Drive

The UK is accelerating infrastructure investment, focusing on energy grid modernization, renewables, and transport. The National Wealth Fund prioritizes sectors like carbon capture and hydrogen, presenting opportunities and challenges for investors and operators.

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Tariff volatility and legal risk

Rapidly shifting “reciprocal” tariffs and sector duties (autos, lumber, pharma, semiconductors) are raising landed costs and contract risk. Pending court challenges to tariff authorities add uncertainty, pushing firms toward contingency pricing, sourcing diversification, and accelerated customs planning.