Mission Grey Daily Brief - December 17, 2024
Summary of the Global Situation for Businesses and Investors
The global situation remains volatile, with the war in Ukraine continuing to dominate headlines. Russia's invasion has led to a widespread international response, with the EU and US imposing sanctions on Russia and its allies, including North Korea and China. The EU's latest package of sanctions targets Russia's shadow fleet of tankers and the military-industrial complex. Meanwhile, Libya's oil industry faces disruptions due to armed clashes, with the National Oil Corporation (NOC) declaring a state of force majeure at a key refinery in Zawiya. In Mayotte, a French territory in the Indian Ocean, a cyclone has caused widespread damage, with hundreds feared dead. Lastly, Myanmar's civil war continues to escalate, with the Arakan Army (AA) seizing control of a key outpost and tightening its grip on Rakhine state.
EU Imposes Sanctions on Chinese Companies and North Korean Minister Over Ukraine War
The EU has imposed sanctions on Chinese companies and a North Korean minister over their involvement in the Ukraine war. The sanctions include asset freezes and visa bans on Chinese firms for supplying Russia's military and on a North Korean minister for sending troops to Russia. The EU has also blacklisted four Chinese companies for "supplying sensitive drone components and microelectronic components" to the Russian military. The sanctions are part of the EU's 15th round of sanctions during the full-scale invasion of Ukraine and aim to tackle the crucial role allegedly being played by China in keeping Russia's war machine going.
US Hits North Korea with Sanctions Over Support for Russia and Ballistic Missile Program
The US has imposed sanctions on North Korea over its support for Russia in the war against Ukraine and its ballistic missile program. The sanctions come as relations between the US and North Korea are at their lowest levels in decades, with Pyongyang distancing itself from democratic governments and forging closer relations with countries like Iran and Russia. The sanctions target 11 people and nine entities, including state-owned companies used by foreigners to exchange foreign currency into North Korean won and banks that facilitate the procurement of supplies for entities supporting Pyongyang's weapons of mass destruction programs.
Libya's Oil Industry Faces Disruptions Due to Armed Clashes
Libya's oil industry, the backbone of its economy, has been caught in the crossfire of political disputes and armed conflict since the fall of late leader Muammar Gaddafi in 2011. On Sunday, the National Oil Corporation (NOC) declared a state of force majeure at a key refinery in Zawiya due to armed clashes that caused significant damage to storage tanks and sparked fires. The Zawiya refinery, Libya's second-largest, processes over 120,000 barrels per day and is the sole supplier of fuel products to the local market. The force majeure declaration exempts the NOC from meeting contractual oil delivery obligations. The events highlight the fragile security situation and its impact on Libya's oil-dependent economy.
Cyclone Chido Batters Mayotte, Causing Widespread Damage and Fear of Hundreds Dead
Mayotte, a French territory in the Indian Ocean, has been battered by Cyclone Chido, causing widespread damage and fear of hundreds dead. The cyclone, the worst in nearly a century, has devastated the island group, with hundreds feared dead. France is rushing rescue workers and supplies to the affected areas, but the full extent of the damage and casualties remains unclear. The cyclone highlights the vulnerability of the region to natural disasters and the need for robust disaster response and recovery efforts.
Myanmar's Civil War Escalates with Arakan Army Seizing Control of Key Outpost
Myanmar's civil war has escalated with the Arakan Army (AA), one of the most formidable ethnic armed groups in the country, seizing control of a key outpost and tightening its grip on Rakhine state. The capture of the outpost marks the fall of the last Myanmar army outpost in the region, securing the AA's dominance over the entire 271-kilometer border with Bangladesh. The ongoing conflict in Rakhine has reignited fears of violence against the Rohingya Muslim minority, a group already subject to widespread persecution. The AA's control now extends to 11 of Rakhine's 17 townships, along with one township in neighboring Chin state. The capture of key towns and the AA's push for autonomy in Rakhine state complicate the junta's efforts to consolidate power and may shift the dynamics of Myanmar's ongoing civil war.
Further Reading:
Arakan Army Seizes Key Myanmar Outpost, Tightens Control Over Rakhine State - Goa Chronicle
Clamp down on Russian shadow fleet after tanker oil spill, says Latvia - POLITICO Europe
Clashes Force Shutdown of Key Libya Oil Refinery, Fires Erupt in Zawiya - News Central
EU adopts 15th package of sanctions against Russia. - Kyiv Independent
Libya’s oil company declares force majeure at key refinery following clashes - Social News XYZ
News Wrap: French territory of Mayotte devastated by cyclone - PBS NewsHour
Themes around the World:
Regulatory Tightening in Cross-Border E-Commerce
Turkey abolished the simplified customs declaration for goods under €30, effective February 2026. All e-commerce imports now face standard procedures, increasing compliance costs and scrutiny for international platforms, with exceptions for medicines and supplements.
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.
US Tariffs and Trade Tensions
Vietnam faces significant headwinds from persistent US tariffs, currently at 20% on key exports, with further tariff proposals under debate. These measures threaten export revenues, supply chain stability, and investment planning, especially for US-focused manufacturers.
Disrupted Energy Supply Chains
Sanctions and Ukrainian drone attacks have slashed Russian crude output to 9.3 million barrels per day, the lowest in 18 months. Export bottlenecks and refinery disruptions are creating volatility in global energy supply and logistics.
Information Blackouts and Operational Challenges
Authorities have imposed extended internet and communication shutdowns, impeding business operations, financial transactions, and supply chain visibility. These blackouts complicate crisis management, due diligence, and compliance monitoring for international firms.
US Secondary Sanctions on Iran Trade
The US imposed a 25% tariff on all countries trading with Iran, significantly affecting global energy and commodity flows. This move, alongside new sanctions on Iranian entities, increases compliance risks and operational complexity for multinationals engaged in cross-border trade, especially in energy and finance.
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.
Geopolitical Balancing: China, US, Japan
South Korea is navigating complex regional dynamics, balancing economic ties with China, security alignment with the US, and strategic engagement with Japan. President Lee’s diplomatic outreach aims to stabilize relations and manage risks from Taiwan tensions and North Korean provocations, affecting business confidence and supply chain security.
Automotive Sector Tariff and Rule Changes
Ongoing negotiations on auto tariffs and rules of origin are central to Mexico’s export competitiveness. Mexico seeks tariff reductions for non-compliant vehicles, while the US pushes for higher regional content. These changes directly impact investment and production strategies in the auto sector.
Sanctions, Export Controls, and Compliance Risk
The US is intensifying sanctions enforcement, especially on Iran and entities linked to protest crackdowns. New secondary sanctions and export controls, including on advanced technology, raise legal and operational risks for global businesses, requiring robust compliance systems and constant monitoring of regulatory changes.
Vision 2030 Economic Diversification Drive
Saudi Arabia’s Vision 2030 continues to drive economic transformation, reducing oil dependency and expanding into sectors like mining, tourism, and technology. This shift is attracting record foreign investment, opening new markets, and reshaping the business environment for international firms.
Sectoral Reforms in Gems, Jewellery, and Services
India’s gem and jewellery sector, valued at $28.7 billion, seeks duty cuts, SEZ reforms, and policy changes to maintain competitiveness amid global demand shifts. Services and technology sectors are also expanding, with India’s GCCs expected to reach $100 billion in annual revenue by 2030.
Trade Policy Uncertainty and Tariffs
Ongoing US tariff negotiations and underutilization of free trade agreements (FTAs) create uncertainty for exporters. Only 54% of eligible Thai firms use FTAs, and shifting US policies pose risks for trade-dependent sectors, requiring businesses to diversify markets and adapt strategies.
AI-Driven Layoffs and Workforce Restructuring
A wave of major layoffs is sweeping the US, with Amazon alone cutting 16,000 jobs in January 2026 and UPS reducing up to 30,000 positions. These cuts are driven by rapid adoption of AI and automation, post-pandemic overhiring corrections, and cost pressures from tariffs and inflation. The trend is reshaping labor markets, increasing anxiety, and forcing companies to invest in upskilling or risk investor backlash. This structural shift impacts tech, logistics, retail, and manufacturing, with significant implications for consumer demand and supply chain resilience.
Intensified Korea-China Trade Negotiations
Ongoing negotiations to expand the Korea-China FTA to services and investment signal deepening economic ties. Progress in these talks could reshape market access, regulatory alignment, and investment flows, influencing regional supply chains and competitive positioning.
Escalating Security Risks and Terrorism
Pakistan faces a surge in terrorist incidents, with 71% originating from Khyber Pakhtunkhwa and a 40% rise in violence in 2025. Persistent attacks, especially targeting infrastructure and foreign interests, elevate operational risks for international businesses and supply chains.
Gulf Rivalry and Regional Instability
Intensifying competition with the UAE over influence in Yemen, Sudan, and Africa is fueling regional instability and media confrontations. This rivalry complicates diplomatic relations and could impact trade, investment flows, and supply chain security across the broader Gulf region.
China-Pakistan Economic Cooperation Expansion
The second phase of CPEC is broadening from infrastructure to agriculture, technology, and minerals. New agreements focus on joint ventures, technology transfer, and value chain development, positioning China as Pakistan’s key strategic and economic partner, but also raising dependency and sovereignty concerns.
Political Consolidation and Policy Continuity
Recent political developments have seen To Lam re-elected as party chief, with efforts to merge top leadership roles. This centralization brings policy stability and reform momentum, but also raises concerns about checks and balances, governance transparency, and long-term institutional resilience for international investors.
Infrastructure Concessions Drive Investment Surge
A record wave of infrastructure concessions—50 auctions in 2023-2025—has attracted over R$229 billion in private investment, especially in ports, highways, and energy. This shift to private sector-led development is improving logistics but also exposes projects to regulatory, financial, and execution risks.
Escalating Human Rights Crisis and Crackdown
Iran’s security forces have responded to protests with lethal force, causing mass casualties and widespread arrests. The government’s actions have drawn international condemnation, increasing reputational and compliance risks for foreign investors and partners.
Manufacturing and Supply Chain Diversification
India’s push for manufacturing, supported by PLI schemes and Make in India, is attracting global supply chains seeking alternatives to China. Electronics exports reached Rs 4 lakh crore in 2025, with mobile phones and semiconductors driving export and employment growth.
Agricultural Supply Chain Vulnerabilities
Railway grain shipments fell 27.3% in 2025, and wheat exports dropped 25% in December due to Russian strikes on ports and logistics. These disruptions, along with delayed harvests and market competition, threaten Ukraine’s role as a global food supplier and heighten risks for agribusiness investors.
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.
Regional Integration and Trade Bloc Leverage
South Africa leverages its role in the African Continental Free Trade Area and regional infrastructure to position itself as a gateway to Africa. This enhances supply chain diversification and trade opportunities, but also requires continued investment in logistics and regulatory harmonization.
Sanctions And Secondary Trade Risks
Sweeping new US sanctions, including up to 500% tariffs on countries buying Russian energy, intensify global trade tensions. These measures affect energy markets, complicate compliance for multinationals, and may trigger retaliatory actions, impacting cross-border investment and supply chain stability.
Energy Stability and Eskom Turnaround
South Africa’s power grid has achieved its most stable period in five years, following Eskom’s recovery plan and a R254 billion bailout. Load shedding has virtually ended, boosting investor confidence and reducing operational risks for businesses.
Geopolitical Tensions and Supply Chain Realignment
Geopolitical competition, especially with China, is prompting US firms to restructure supply chains, diversify sourcing, and invest in regional trade agreements. These shifts are reshaping global trade flows and increasing operational complexity for international businesses.
US Sanctions Policy Intensifies
The US continues to expand sanctions, targeting Iranian officials, entities, and financial networks linked to oil sales and human rights abuses. These measures increase compliance risks for global firms, especially those with exposure to sanctioned jurisdictions and complex cross-border transactions.
Sectoral Divergence: Defense Gains, Cyclicals Suffer
While export-driven sectors like automotive and luxury goods face losses, defense companies such as Rheinmetall and Renk have seen stock gains amid heightened geopolitical tensions. This divergence underscores shifting investor sentiment and the growing importance of security-related industries in Germany’s economic landscape.
US-Israel Strategic Alliance and Policy Certainty
The US-Israel relationship remains robust, with close alignment on security, technology, and trade. Strong diplomatic and military ties provide policy predictability for investors, but also mean that shifts in US administration or regional tensions can quickly impact sanctions, export controls, and market access.
Regional Security Tensions and Military Threats
U.S. threats of military intervention, ongoing proxy conflicts, and the weakening of Iran’s regional alliances have heightened security risks. The potential for escalation jeopardizes cross-border trade, energy transit, and the safety of international personnel and assets.
Structural Financial System Constraints
Pakistan’s financial system is dominated by government borrowing, crowding out private sector credit. With Rs 37 trillion in public debt exceeding banking deposits, exporters and manufacturers face high borrowing costs, stifling industrial growth and undermining export competitiveness.
Uncertain Path to Palestinian Statehood and Reform
The phased peace plan envisions Palestinian reforms and eventual statehood, but Israeli opposition and internal Palestinian divisions stall progress. The lack of political clarity deters long-term investment and complicates regulatory forecasting for international firms.
Labor Market and Talent Dynamics
Taiwan’s advanced manufacturing sector is experiencing labor shortages and competition for engineering talent, exacerbated by global expansion. Demographic trends and workforce development are critical factors for sustaining innovation and operational resilience.
Resilience and Adaptation in Economic Policy
Despite external shocks, Germany and the eurozone have shown resilience, with 1.4% growth in 2025. A major stimulus plan, investment in digital and green infrastructure, and labor market reforms are redefining Germany’s economic role and supporting competitiveness amid global uncertainty.