Mission Grey Daily Brief - January 10, 2025
Summary of the Global Situation for Businesses and Investors
The global situation remains complex and volatile, with several geopolitical and economic developments that could impact businesses and investors. The Ukraine-Russia war continues to be a major concern, with Donald Trump pushing back the war deadline and the US pledging $500 million in weapons and ammunition for Kyiv. Meanwhile, North Korea's involvement in the war and Donald Trump's threats over Greenland and Ukraine could have significant implications for NATO. In the Middle East, the US has imposed sanctions on Sudan's Rapid Support Forces (RSF) and its leader, Mohamed Hamdan Dagalo, over allegations of genocide and human rights abuses. Lastly, the US is building a Pacific island fortress against China, indicating a potential escalation in tensions between the two countries.
Ukraine-Russia War
The Ukraine-Russia war remains a significant concern for businesses and investors, with Donald Trump pushing back the war deadline and the US pledging $500 million in weapons and ammunition for Kyiv. This development could have a positive impact on the Ukrainian economy, as it will provide much-needed support for the country's military and help to stabilise the situation. However, it is important to note that the war is far from over, and the situation remains highly volatile. Businesses and investors should continue to monitor the situation closely and be prepared for potential risks and opportunities.
North Korea's Involvement in the Ukraine-Russia War
North Korea's involvement in the Ukraine-Russia war is a significant development that could have far-reaching implications for the region. Nearly 12,000 North Korean soldiers have been training in Russia and fighting in the Kursk region, and the country is "significantly benefiting" from receiving Russian military equipment, technology, and experience. This development could lead to an increase in North Korea's military capabilities and willingness to engage in military conflicts with its neighbours. Businesses and investors should be aware of the potential for increased tensions in the region and the possibility of further military action by North Korea.
Donald Trump's Threats over Greenland and Ukraine
Donald Trump's threats over Greenland and Ukraine could have significant implications for NATO. Trump has called for NATO allies to spend 5% of their national income on defence, which could plunge European governments into crisis mode. Additionally, Trump has threatened to seize Greenland by force, which could undermine the alliance's founding principle of Article 5. This development could lead to a rift within NATO and legitimise Russia's invasion of Ukraine. Businesses and investors should be aware of the potential for increased tensions within NATO and the possibility of further military action by Russia.
US Sanctions on Sudan's Rapid Support Forces (RSF)
The US has imposed sanctions on Sudan's Rapid Support Forces (RSF) and its leader, Mohamed Hamdan Dagalo, over allegations of genocide and human rights abuses. This development could have a significant impact on the Sudanese economy, as it will limit the country's ability to access international financial markets and trade. Additionally, the sanctions could lead to further instability in the region, as the RSF is a powerful paramilitary group that controls roughly half of the country. Businesses and investors should be aware of the potential for increased risks in the region and the possibility of further sanctions or military action by the US.
Further Reading:
America is building an impregnable Pacific island fortress against China - The Telegraph
Charlie Kirk Says Greenland Is Ready and Willing for a Trump Invasion - The Daily Beast
Donald Trump pushes back Ukraine war deadline in sign of support for Kyiv - Financial Times
Donald Trump's threats over Greenland and Ukraine could be a make-or-break test for NATO - Sky News
Keith Kellogg predicts Trump will accomplish 'near-term' solution to Russia-Ukraine war - Fox News
North Korea benefiting from troops fighting alongside Russia, US warns - The Independent
Russia is alarmed by Trump's Greenland plan - but it could work in the Kremlin's favour - Sky News
Themes around the World:
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.
Expanding U.S. secondary penalties
Washington is tightening enforcement on Iranian trade through new sanctions targeting oil/petrochemical networks and a 25% tariff threat on countries trading with Iran. This elevates compliance costs, raises counterparty risk, and may force rapid supplier requalification.
Border crossings and movement constraints
Rafah’s limited reopening and intensive screening regimes underscore persistent frictions in people movement and (indirectly) trade flows. Firms relying on regional staff mobility, humanitarian/contractor access, or cross-border services should plan for sudden closures, enhanced vetting and longer lead times.
Rail-border bottlenecks and gauge mismatch
Efforts to integrate Ukraine’s rail with EU networks highlight structural constraints: different track gauges require transshipment at borders, creating durable chokepoints. Any surge in exports or reconstruction imports can overwhelm terminals, extending lead times and pushing firms to diversify routing via Danube and road.
Escalating energy grid disruption
Sustained Russian missile and drone strikes are driving nationwide power rationing, forcing factory downtime, higher generator and fuel imports, and unstable cold-chain logistics. Grid repairs are slow due to scarce transformers and long lead times, raising operating costs and continuity risk.
Mining Sector Emerges as Strategic Pillar
Saudi Arabia is investing $110 billion to develop its $2.5 trillion mineral reserves, including rare earths, gold, and copper. The Kingdom seeks to become a regional processing hub, partnering with US firms and reducing global supply chain dependence on China for critical minerals.
Riesgos de seguridad y continuidad
La violencia criminal y extorsión siguen siendo un riesgo estructural para operaciones, transporte y personal, especialmente en corredores industriales y logísticos. Incrementa costos de seguros, seguridad privada y cumplimiento, y puede provocar interrupciones de proveedores y rutas, afectando puntualidad exportadora.
Robust Non-Oil Growth Bolsters Economic Outlook
Saudi Arabia’s GDP grew 4.5% in 2025, with non-oil sectors expanding 4.9%. Sustained growth in non-hydrocarbon industries is enhancing economic resilience, supporting demand for international goods and services, and diversifying the Kingdom’s role in global supply chains.
National Privatization Strategy Expands PPPs
The new National Privatization Strategy aims to sign over 220 public-private partnership contracts and mobilize $64 billion in private investment by 2030. This initiative opens infrastructure, health, education, and logistics to foreign investors, enhancing competitiveness and operational efficiency.
Gigafactory build-out accelerates
ProLogium’s Dunkirk solid-state gigafactory broke ground in February 2026, targeting 0.8 GWh in 2028, 4 GWh by 2030 and 12 GWh by 2032, with land reserved to scale to 48 GWh—reshaping European sourcing and localisation decisions.
India-EU Free Trade Agreement Impact
The India-EU FTA, finalized after 18 years, will eliminate tariffs on over 90% of goods and liberalize services, unlocking up to $11 billion in new exports. It strengthens India’s integration into global value chains, but compliance costs and EU carbon taxes remain challenges.
Critical Minerals Supply Chain Realignment
Australia is advancing a critical minerals strategy, including a $1.2 billion strategic reserve and international partnerships, to reduce dependence on China. This shift is reshaping global supply chains for rare earths, gallium, and antimony, with significant implications for technology and defense sectors.
Electronics export surge reshapes supply chains
Electronics exports hit $22.2bn in the first half of FY26; mobile production rose nearly 30x from FY15 to FY25, making India the world’s second-largest phone manufacturer. Opportunities grow in EMS, components, tooling, and specialized logistics.
AUKUS and Indo-Pacific Security Dynamics
Australia’s deepening defense ties with the US and UK through AUKUS reinforce its strategic role in the Indo-Pacific. This alliance supports supply chain security and regional stability, but also increases expectations for Australia’s defense spending and self-reliance amid rising China-US competition.
Baht volatility and US watchlist
Thailand’s placement on the US Treasury currency watchlist and central bank efforts to curb baht swings—incl. tighter online gold-trading limits (50m baht/day cap from March 1)—raise FX-management sensitivity. Export pricing, profit repatriation, and hedging costs may shift.
Shipbuilding and LNG carrier upcycle
Korean shipbuilders are in a profitability upswing with multi‑year backlogs (about $124bn) driven by LNG carriers and IMO emissions rules, while China closes the gap. Global buyers and suppliers should expect capacity constraints, price firmness, and technology-driven differentiation.
US tariffs hit German exports
US baseline 15% EU duty is biting: Germany’s 2025 exports to the United States fell 9.3% to about €147bn; the bilateral surplus dropped to €52.2bn. Automakers, machinery and chemicals face margin pressure, reshoring decisions, and supply-chain reconfiguration.
Power stability, grid bottlenecks
Eskom reports 200+ days without load-shedding and higher availability, boosting operational continuity. However, slow transmission expansion and contested unbundling constrain new generation connections, risking future curtailment for energy-intensive firms and delaying renewable-led decarbonisation plans.
Frozen assets, litigation, retaliation risk
Debate over using immobilized Russian sovereign assets to back Ukraine financing is intensifying, alongside Russia’s lawsuits against Euroclear seeking about $232bn. Businesses face heightened expropriation/retaliation risk, asset freezes, and legal uncertainty for custodial holdings, claims, and arbitration enforceability.
Election-driven fiscal and policy volatility
The Feb 8 election and “populism war” amplify risks of debt-funded stimulus, policy reversals, and slower permitting. Bond-curve steepening on fiscal worries signals higher funding costs and potential ratings pressure, affecting PPPs, SOEs, and investor confidence.
Critical minerals and rare earth security
Seoul is moving to strengthen rare-earth supply chains by easing public-sector limits on overseas resource development, expanding domestic processing and recycling, and coordinating with partners while managing China export-control risks. This supports EV, wind, defense, and electronics supply continuity and investment pipelines.
Supply Chain Diversification and Resilience
Brazilian and regional supply chains are undergoing realignment due to geopolitical tensions, climate events, and infrastructure investments. Companies are investing in logistics, digital tools, and nearshoring to mitigate disruption risks and enhance operational reliability across the Americas.
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.
Auto sector disruption and China competition
Chinese vehicle imports are surging, widening the China trade gap and intensifying pressure on local manufacturing. Government is courting Chinese investment (e.g., potential plant transfers) while considering trade defenses and new-energy-vehicle policy. Suppliers face localisation shifts, pricing pressure and policy uncertainty.
Domestic unrest and security crackdown
Large-scale protests and lethal repression are elevating operational and reputational risk for foreign-linked firms. Risks include curfews, disrupted labor availability, arbitrary enforcement, asset seizures, and heightened human-rights due diligence expectations from investors, banks, and regulators.
Defense export surge into Europe
Hanwha Aerospace’s ~$2.1bn Norway deal for the Chunmoo long-range fires system underscores Korea’s growing defense-industry competitiveness and government-backed “Team Korea” diplomacy. It signals expanding European demand, offset/industrial-partnership opportunities, and tighter export-control and compliance requirements.
Immigration tightening and talent constraints
Stricter U.S. visa policies are disrupting global talent mobility. H‑1B stamping backlogs in India reportedly extend to 2027, alongside enhanced vetting and a wage-weighted selection rule effective Feb 27, 2026, raising staffing risk for tech, healthcare, and R&D operations.
Food import inspections disrupt logistics
New food-safety inspection rules (Decree 46) triggered major port and border congestion: 700+ consignments (~300,000 tonnes) stalled in late January and 1,800+ containers stuck at Cat Lai. Compliance uncertainty raises lead times, storage costs and inflation risks.
US trade access and tariff risk
AGOA has been extended only one year, restoring preferences but preserving policy uncertainty and potential eligibility reviews. South Africa accounted for about half of the $8.23bn AGOA exports in 2024; short renewals complicate automotive, metals and agriculture investment decisions and contracting horizons.
Eastern Economic Corridor Infrastructure Push
Thailand is accelerating infrastructure megaprojects in the Eastern Economic Corridor, including the U-Tapao Airport City PPP and a proposed Disneyland-style complex. These initiatives are designed to attract FDI, boost tourism, and create a high-tech industrial hub, but require policy continuity and investor confidence.
Fiscal outlook and debt path
Brazil’s primary deficit was R$61.7bn in 2025 (0.48% of GDP), while gross debt ended near 79.3% of GDP and is projected higher. Fiscal rules rely on exclusions, raising risk premiums, FX volatility and financing costs for investors and importers.
US–China trade recalibration persists
Tariffs, technology barriers and geopolitical bargaining are shifting bilateral flows from simple surplus trade toward a more complex pattern. China–US goods trade fell 18.2% in 2025 to 4.01 trillion yuan ($578bn). Firms respond via localization, alternative sourcing, and hedged market access planning.
US reciprocal tariff deal pending
Indonesia and the US are preparing to sign an Agreement on Reciprocal Tariff (ART), with talks reportedly reducing a mooted 32% US tariff to ~19% and carving out key Indonesian exports. Commitments may include ~$15bn Indonesian purchases of US energy, reshaping trade flows.
Regulatory Overhaul and Compliance
Significant regulatory changes are underway in the UK, including updates to employment law, financial regulations, and business compliance regimes. Companies must adapt quickly to avoid penalties and ensure operational continuity.
EV and automotive supply-chain shift
Thailand’s auto sector is pivoting toward electrification: 2025 production about 1.455m units (−0.9%), while BEV output surged (reported +632% to 70,914) and sales rose (+80%). Incentives and OEM localization change parts sourcing, standards, and competitor dynamics.
EU Trade Relations and GSP+ Extension
The EU’s extension of GSP+ status until 2027 secures duty-free access for Pakistani exports, especially textiles, contingent on continued progress in human rights and governance. This preferential access is vital for export-led growth and supply chain resilience to European markets.