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Mission Grey Daily Brief - January 09, 2025

Summary of the Global Situation for Businesses and Investors

The global situation is marked by escalating tensions and shifting geopolitical dynamics. Khamenei is pushing for a US withdrawal from Iraq, while Trump's expansionist agenda and threats of military action in Panama and Greenland are causing concern. Tensions between China and Taiwan are rising, with Taiwan demonstrating its sea defenses and China conducting wargames. Meanwhile, the US warns of North Korea's growing military capabilities due to its alliance with Russia in the Ukraine war. The Sudanese civil war continues, with the US imposing sanctions on the Rapid Support Forces (RSF) and allied militias for genocide.

Trump's Expansionist Agenda and Threats of Military Action

Donald Trump, the President-elect of the United States, has been making controversial statements regarding acquiring Greenland and the Panama Canal, refusing to rule out military action to secure these territories. Trump has also criticised NATO allies for not contributing sufficiently to the alliance, demanding a significant increase in defence spending to 5% of GDP. This has led to a rally in European defence stocks, with shares in defence companies rising as markets anticipate increased defence budgets.

Trump's aggressive foreign policy and threats of military action have raised concerns among European nations and Canada. Denmark, France, and Germany have responded to Trump's interest in Greenland, with Denmark symbolically reaffirming its sovereignty over the territory. Canada's Minister of Foreign Affairs, Melanie Joly, has rejected Trump's comments, stating that Canada will not back down in the face of threats.

Rising Tensions Between China and Taiwan

Tensions between China and Taiwan are escalating, with Taiwan demonstrating its sea defenses against a potential Chinese attack. Taiwan's navy showcased its fast attack missile boats and corvettes near Kaohsiung, a major international trade hub. This display is part of Taiwan's strategy to deter a Chinese invasion, as it relies on its flexible defense capabilities to counter the larger Chinese military.

China routinely challenges Taiwan's defenses, sending ships and planes to test Taiwan's willingness and ability to respond. Taiwan has demanded an end to China's military activity in nearby waters, citing disruptions to international shipping and trade. The authoritarian Chinese government has refused communication with Taiwan's pro-independence governments since 2016, and there are concerns about a potential military escalation.

North Korea's Growing Military Capabilities and Alliance with Russia

The US has warned that North Korea is significantly benefiting from its alliance with Russia in the Ukraine war. Nearly 12,000 North Korean soldiers have been training in Russia and gaining battlefield experience by fighting alongside Russian forces. This has enhanced North Korea's military capabilities and increased its potential to wage war against its neighbours, such as South Korea and Japan.

The US and the UK have criticised North Korea's leader, Kim Jong Un, for sending soldiers to fight in a foreign war. The alliance between North Korea and Russia was strengthened by a strategic defence treaty signed during Putin's state visit to Pyongyang in 2024. This treaty commits both countries to mutual aid in the event of armed conflict.

Sudanese Civil War and US Sanctions

The Sudanese civil war continues to create a humanitarian crisis, with UN agencies struggling to deliver relief. The US has determined that the Rapid Support Forces (RSF) and allied militias have committed genocide in the conflict, killing tens of thousands and displacing millions. The US has imposed sanctions on the RSF leader, Mohamed Hamdan Dagalo, and seven RSF-owned companies based in the United Arab Emirates, freezing their assets and barring them from US travel.

The RSF has rejected these measures, denying harm to civilians and attributing violence to rogue actors. The US Secretary of State, Antony Blinken, has condemned the RSF's actions, stating that they bear command responsibility for abhorrent and illegal actions. The RSF's attempts to assert legitimacy and install a civilian government have been undermined by these sanctions.


Further Reading:

A Near-Nuclear Iran Awaits Trump - AOL

Before Trump scoops up Canada, he’s eyeing up Greenland: Watters - Fox News

China’s latest Taiwan wargame established a strategic position before Trump arrives - The Telegraph

Denmark, France and Germany respond to Trump sizing up Greenland - CGTN

Donald Trump refuses to rule out military force over Panama Canal and Greenland - as he warns NATO to spend more - Sky News

Jamenei presiona por la retirada estadounidense de Irak en reunión con Sudán - Al-Monitor

Khamenei pushes for US withdrawal from Iraq in meeting with Sudani - Al-Monitor

North Korea benefiting from troops fighting alongside Russia against Ukraine, US says - The Independent

Taiwan demonstrates sea defenses against potential Chinese attack as tensions rise with Beijing - The Independent

Trump will not rule out using military force to take Panama Canal, Greenland - FRANCE 24 English

Trump's Greenland and NATO comments spark defence stocks rally - Euronews

US determines Sudan’s RSF committed genocide, imposes sanctions on leader - Sight Magazine

US determines members of Sudan's RSF committed genocide, imposes sanctions on leader Hemedti - The Eastleigh Voice News

Themes around the World:

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New trade deals and friend-shoring

US is using reciprocal trade agreements to rewire supply chains toward strategic partners. The US–Taiwan deal caps many tariffs at 15%, links chip treatment to US investment, and includes large procurement and investment pledges, influencing regional manufacturing footprints and sourcing decisions.

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China-border trade integration risks

Northern localities and China’s Guangxi are expanding cross-border trade, e-commerce and agri flows; Guangxi-Vietnam agri trade reached ~CNY18.23bn in 2025. Benefits include faster market access, but firms must manage geopolitical exposure, border policy shifts, and compliance with origin/traceability.

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US–Taiwan tariff pact reset

The newly signed US–Taiwan reciprocal trade deal lowers US tariffs on Taiwan to 15% and has Taiwan remove or reduce 99% of tariff barriers on US goods. It reshapes sourcing, pricing, compliance, and market-entry strategies across electronics, machinery, autos, and agriculture.

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E-Auto-Förderung und Autowandel

Die Regierung reaktiviert E-Auto-Subventionen (1.500–6.000 €, ca. 3 Mrd. €, bis zu 800.000 Fahrzeuge). Das stabilisiert Nachfrage, beeinflusst Flottenentscheidungen und Zulieferketten. Gleichzeitig verschärfen EU-Klimaziele und Konkurrenz aus China Preisdruck, Lokalisierung und Technologietransfer-Debatten.

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Maritime services ban risk

Brussels is moving from the G7 price cap toward a full ban on EU shipping, insurance and other maritime services for Russian crude at any price. With EU-owned tankers still carrying ~35% of Russia’s oil, logistics and freight availability may shift abruptly.

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U.S. tariff and ratification risk

Washington is threatening to lift tariffs on Korean goods from 15% to 25% unless Seoul’s parliament ratifies implementation laws tied to a $350bn Korea investment pledge. Exporters face pricing shocks, contract renegotiations, and accelerated U.S. localization pressure.

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Improving external buffers and ratings

Fitch revised Turkey’s outlook to positive, citing gross FX reserves near $205bn and net reserves (ex-swaps) about $78bn, reducing balance-of-payments risk. Better buffers can stabilize trade finance and counterparty risk, though inflation and politics still weigh on sentiment.

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Sanctions expansion and enforcement risk

U.S. sanctions and enforcement are intensifying on Iran-linked networks, including “shadow fleet” logistics and digital-asset channels, increasing secondary-risk exposure for shippers, traders, insurers, and banks. Compliance costs rise, with higher disruption risk for Middle East supply routes.

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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.

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Nickel quota tightening and audits

Jakarta plans to cut 2026 nickel ore mining permits to 250–260m wet tons from 379m in 2025, alongside MOMS verification delays and tighter audits. Expect supply volatility, higher nickel prices, and permitting risk for battery, steel, and EV supply chains.

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Foreign investment security tightening

Ottawa is balancing growth and national security under the Investment Canada Act, amid debate about allowing greater Chinese state-owned participation in energy and resources. Case-by-case reviews increase deal uncertainty, lengthen timelines, and can impose mitigation conditions for acquirers and JVs.

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Ciclo de juros e inflação

Com Selic em 15% e inflação em 12 meses perto de 4,44% (abaixo do teto de 4,5%), o mercado precifica início de cortes em março, possivelmente 50 bps. Isso afeta custo de capital, demanda doméstica, hedge cambial e valuations.

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Pressão ESG: EUDR e rastreabilidade

A entrada em vigor do regulamento europeu antidesmatamento (EUDR) aumenta exigências de geolocalização, due diligence e segregação de cargas para soja, carne, café e madeira. Isso eleva custos de conformidade, risco de bloqueio de exportações e necessidade de tecnologia e auditorias.

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Nuclear talks, snapback uncertainty

Iran–US nuclear diplomacy restarted via Oman/Türkiye but remains fragile, with disputes over uranium enrichment, missiles and scope. Missing highly enriched uranium and IAEA scrutiny sustain “snapback”/renewed UN measures risk, complicating long-term investment and trade planning.

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EV policy reset and incentives

Canada scrapped the 2035 100% ZEV sales mandate, shifting to tighter tailpipe/fleet emissions standards plus renewed EV rebates (C$2.3B over five years) and charging funding (C$1.5B). Automakers gain flexibility; investors must reassess demand forecasts and compliance-credit markets.

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Crypto-based payments and enforcement

Sanctions and FX scarcity are accelerating use of crypto and stablecoins for trade settlement and wealth preservation, drawing increased OFAC attention and first-time sanctions on exchanges tied to Iran. This raises AML/KYC burdens and counterparty screening complexity for fintech and traders.

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Shadow fleet interdictions rising

Western navies are shifting from monitoring to physical interdiction: boardings, detentions and possible seizures of ‘stateless’ or falsely flagged tankers are increasing. Russia is reflagging vessels; ~640 ships are sanctioned. Shipping, port, and insurance risk premiums are rising materially.

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Currency management and capital controls

Beijing’s preference for financial stability sustains managed exchange-rate policy and episodic tightening on capital outflows. Firms face repatriation frictions, FX hedging costs, and potential constraints on intercompany funding, dividends, and cross-border M&A execution timing and approvals.

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AML/CTF bar for crypto access

FCA registration milestones (e.g., Blockchain.com) show continued selectivity under UK Money Laundering Regulations. Firms need robust CDD, transaction monitoring, record-keeping and senior-manager accountability, influencing partner bank access and cross-border onboarding scalability.

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Pharma market access and import controls

US–India framework provisionally shields Indian generic pharma exports (≈$10bn/yr) from reciprocal tariffs, while India pledges to address medical device barriers. Separately, India restricts low-priced penicillin imports via minimum CIF thresholds, influencing API sourcing and pricing.

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الخصخصة وإعادة هيكلة الشركات الحكومية

تسريع برنامج تقليص دور الدولة عبر إعداد 60 شركة: نقل 40 لصندوق مصر السيادي وتجهيز 20 للقيد/الطرح في البورصة، مع إنشاء منصب نائب رئيس وزراء للشؤون الاقتصادية. ذلك يخلق فرص استحواذ وشراكات، لكنه يتطلب وضوحاً في الحوكمة والتقييمات وحقوق المستثمرين.

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Nickel quotas reshape supply

Jakarta is tightening nickel mining RKAB quotas, slashing major producers’ 2026 allowances and targeting national output around 260–270 million tons versus 379 million in 2025. Ore shortages may boost imports, alter battery-material supply chains, and raise project execution risk.

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Permitting and local opposition hurdles

Large battery projects face heightened scrutiny on safety and environmental grounds. In Gironde, the €500m Emme battery project on a high-Seveso site drew calls for independent risk studies, signalling potential delays, added mitigation costs and reputational risks for investors and suppliers.

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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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Energy transition supply-chain frictions

Rising restrictions and tariffs targeting Chinese-origin batteries and energy storage (e.g., FEOC rules, higher Section 301 tariffs) are forcing earlier compliance screening, origin tracing, and dual-sourcing—impacting project finance, delivery schedules, and total installed costs globally.

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Won volatility and FX buffers

Authorities issued $3bn in FX stabilization bonds as reserves fell to about $425.9bn end‑January, signaling concern about won pressures amid global rates and capital outflows. Importers/exporters should tighten hedging, review pricing clauses, and monitor liquidity conditions.

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Industrial policy reshapes investment

CHIPS/IRA-style incentives and local-content rules steer capex toward U.S. manufacturing, batteries, and clean tech, while raising compliance complexity for multinationals. Subsidies can improve U.S. project economics, but may trigger trade frictions, retaliation, and fragmented global production strategies.

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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.

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Energy security under blockade scenarios

Taiwan’s import dependence, especially for LNG, creates acute vulnerability to maritime interference. Policy efforts to prioritize energy security underline risks of power shortages and industrial curtailment, affecting fabs, chemicals, and data centers with high uptime requirements.

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Critical minerals alliance, China risk

Japan is aligning with the US and EU on a critical minerals framework to diversify mining, refining, recycling and stockpiling, responding to China’s export controls on rare earths. Expect tighter compliance expectations, higher input costs, and new investment incentives in non-China supply.

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Commodity price volatility, capacity stress

Downstream processing economics are challenged by price swings (e.g., lithium refining closures) despite strategic policy support. International partners should structure flexible offtakes, consider tolling/hedging, and evaluate counterparty resilience, as consolidation and state-backed support reshape the sector.

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Hydrogen-for-heating strategic uncertainty

Germany’s hydrogen backbone and standards work can divert capital and workforce from near‑term electrification, creating uncertainty about future building-heat pathways. Businesses face technology‑mix risk across boilers, H₂-ready assets, and grid upgrades—affecting product roadmaps and infrastructure investment timing.

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Sanctions compliance incentives harden

OFSI now states penalties can be reduced up to 30% for self-reporting and cooperation. For online investing firms with cross-border clients, stronger screening, escalation and audit trails become strategic necessities as UK sanctions enforcement intensity rises.

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Bahnnetz-Sanierung stört Logistik

Großbaustellen bei der Bahn (u.a. Köln–Hagen monatelang gesperrt) verlängern Laufzeiten im Personen- und Güterverkehr und erhöhen Ausweichkosten. Für internationale Lieferketten steigen Pufferbedarf, Lagerhaltung und multimodale Planung; zugleich bleibt die Finanzierung langfristiger Netzmodernisierung unsicher.

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EU compliance for XR biometrics

Immersive systems increasingly process eye-tracking and other biometric signals. In Finland, EU AI and data-protection compliance expectations shape product design, data localization and vendor selection, raising assurance costs but improving trust for regulated buyers in defence, healthcare and industry.

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War-risk insurance and finance scaling

Multilaterals are expanding risk-sharing and investment guarantees (e.g., EBRD record financing and MIGA guarantees), improving bankability for projects despite conflict. Better coverage can unlock FDI, contractor mobilization, and longer-tenor trade finance, though premiums remain high.