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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 against Ukraine, US says - The Independent

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

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

Ukraine-Russia war latest: US pledges $500m in weapons and ammunition for Kyiv to fight Putin’s forces - The Independent

Themes around the World:

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Nearshoring constrained by policy uncertainty

Mexico’s nearshoring upside is tempered by weaker private investment and legal uncertainty after judicial reforms. Plan México targets 5.6 trillion pesos through 2030, yet new-project FDI is limited. Investors are delaying commitments, increasing hurdle rates and due diligence demands.

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Maritime services restrictions risk

Policy debate is shifting from price-cap compliance to a full maritime services ban, targeting insurance, brokering and shipping support for Russian crude and products. If adopted, it would sharply reduce lawful service availability, complicate chartering and claims, and raise freight and legal costs globally.

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Data-center and digital infrastructure boom

Vietnam is attracting multi‑billion‑dollar data-center investments, including projects targeting up to USD 2bn in Ho Chi Minh City, as regional cloud demand surges. Businesses should plan for permitting complexity, power and water availability, and evolving cybersecurity and data-governance requirements.

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Ports and logistics connectivity upgrades

Deep-water gateways like Cai Mep–Thi Vai are expanding mainline services, handling over 700,000 TEUs in January, supported by expressways and bridge projects that cut inland transit times. This improves export reliability, yet customs delays and trucking capacity still disrupt lead times.

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GST digitisation expands compliance net

GST registrations rose from ~1.56 crore to ~1.61 crore (Oct 2025–Feb 2026), aided by 3‑day low-risk registration (Rule 14A), Aadhaar authentication, and e‑invoicing integration. This improves formalisation but increases auditability and compliance demands for suppliers and marketplaces.

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US/EU trade enforcement risk

Vietnam’s export boom faces rising trade-remedy scrutiny. Recent U.S. antidumping/countervailing duties include hard empty capsules with 47.12% dumping and 2.45% subsidy rates, signalling broader enforcement risk. Exporters should strengthen origin compliance and diversify end-markets.

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Expanded Section 301 enforcement

USTR is launching new Section 301 investigations targeting industrial overcapacity, forced labor, pharmaceutical pricing, and discrimination against US tech and digital goods. These probes can drive targeted tariffs and compliance demands, raising partner-country risk and reshaping sourcing decisions.

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Digital payments scaling with regulation

Uganda’s mobile-money ecosystem is expanding, with new licensed payment operators entering. Cross-border merchants benefit from easier local rails and multi-currency settlement, while regulators tighten AML, fraud controls and consumer protection—raising compliance costs but reducing transaction risk.

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Accelerating EV manufacturing investments

Indonesia is courting EV makers and integrated battery projects (US$7–8bn; ~20GW capacity plans) and reports EV sales above 100,000 in 2025 (~12.9% share). Incentives and localization ambitions support supply-chain clustering but depend on nickel policy and infrastructure execution.

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Trade finance isolation and FATF blacklist

Iran remains on the FATF “call for action” blacklist, constraining correspondent banking and increasing de‑risking by global banks. This elevates AML/CFT due diligence burdens, pushes trade into barter or informal channels, and complicates receivables, escrow, and documentary trade instruments.

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China–EU EV trade frictions

European scrutiny of Chinese EVs and subsidies—alongside broader EU instruments like the Foreign Subsidies Regulation—raises tariff and compliance exposure for automakers, battery makers, and downstream distributors. Firms should expect localization pressure, documentation burdens, and potential retaliatory measures affecting market access.

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Vision 2030 spending recalibration

PIF is resetting its 2026–2030 strategy toward industry, minerals, AI and tourism while re-scoping mega-projects like NEOM’s The Line amid fiscal pressure from lower oil prices. Investors should expect shifting procurement pipelines, timelines and counterparties across giga-project supply chains.

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Power security and fast load

Electricity demand is targeted to grow 15%+ in 2026, forcing accelerated generation and transmission build-out. EVN plans hundreds of grid projects and pursues cross-border imports, targeting ~8,000 MW from Laos by 2030. Energy constraints can disrupt factories, data centers, and pricing.

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Policy shifts for higher-value investment

Amended investment and tax rules are steering incentives toward upstream, higher-tech activities such as semiconductor-related projects and advanced components. Benefits can be meaningful, but eligibility, localization, and reporting requirements are tightening. Firms should structure projects for qualification early.

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Semiconductor manufacturing scale-up

India is accelerating the India Semiconductor Mission: ISM 2.0 allocates ₹40,000 crore, while projects like the ₹3,700‑crore HCL–Foxconn OSAT aim for 20,000 wafers/month by 2027. Incentives attract supply-chain relocation but execution and ecosystem gaps remain.

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IMF program conditionality pressure

The Feb–Mar IMF review of Pakistan’s $7bn EFF and RSF drives tax, governance, energy and budget reforms. Missing FBR revenue targets (Rs329–372bn shortfall) could trigger tougher measures, affecting pricing, demand, import rules and investor confidence.

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Rising labor costs and compliance

A new minimum-wage adjustment is being prepared for 2026, with regional classifications and mandatory social insurance and union-related contributions affecting total labor cost. Manufacturers should budget for wage drift, update payroll compliance, and reassess automation versus hiring plans.

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Currency volatility and capital flows

Risk-off episodes can trigger sharp foreign outflows and TWD depreciation; recent moves saw the Taiwan dollar near 31.8 per USD and record weekly equity selling. Companies should strengthen FX hedging, review pricing clauses, and stress-test liquidity for import-heavy operations.

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Defense-tech boom and controls

War-driven demand is accelerating Israel’s defense-tech ecosystem (defense startups reportedly rising from 160 to 312). This supports growth but increases scrutiny of dual-use exports, compliance burdens, and reputational considerations for partners, investors, and supply chains touching defense.

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EU accession regulatory convergence

Substantive EU accession negotiations and benchmark monitoring accelerate alignment with EU acquis across internal market, external relations and rule-of-law chapters. Companies face fast-evolving standards, compliance and reporting demands, but benefit from clearer market access trajectories.

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Governance and anti-corruption scrutiny

High-profile investigations in strategic sectors (notably energy) and donor conditionality keep governance risk central. Political fallout from anti-corruption actions can affect state-owned enterprise contracts, permitting, and procurement timelines, increasing the value of robust compliance programs and transparent tender strategies.

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Labor supply, immigration, and productivity

Tight labor markets and productivity challenges are pushing firms to rely on immigration pipelines and automation. Policy shifts in admissions targets and credential recognition can materially affect project delivery and service capacity, particularly in construction, healthcare, logistics, and advanced manufacturing hubs.

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Fiscal tightening and policy volatility

France’s 2026 budget was forced through amid a hung parliament, with a deficit around 5–5.4% of GDP and pressure under EU fiscal rules. Expect tax, subsidy and spending adjustments, raising regulatory uncertainty for investors and procurement pipelines.

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Liquidity shifts as rates rise

Analysts warn a move toward a 1% policy rate could trigger large household flows into bank deposits, complicating money markets as the BoJ shrinks its balance sheet. Corporates may face changing bank funding behavior, altered commercial paper pricing, and episodic short-term rate volatility.

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Commerce UE-Mercosur et mesures miroirs

L’application provisoire de l’accord UE‑Mercosur ravive la contestation agricole et le débat sur l’interdiction d’importations non conformes aux normes françaises (pesticides). Risques de nouvelles exigences SPS, contrôles frontière et tensions commerciales impactant agroalimentaire et distribution.

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USMCA renegotiation and exit risk

With the mandatory USMCA review approaching, Washington is signaling tougher rules of origin and reshoring demands, while President Trump has mused about withdrawal. This uncertainty raises tariff and compliance risk across North American supply chains, investment plans, and cross-border pricing.

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EEC-led FDI and re-shoring

Foreign investment is concentrating in the Eastern Economic Corridor: January 2026 permits totaled THB33.8bn (+46% y/y), with the EEC taking 43% (THB14.6bn). Focus areas include automation, contract manufacturing, EV supply chains, and services—strengthening Thailand’s role as ASEAN production base.

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Nickel controls reshape EV chains

Indonesia tightened state control over nickel—about 60% of global mine supply in 2024—via ore-export bans, RKAB quota cuts and seizures/fines (US$1.7bn). Policy shifts can swing global prices and alter EV battery, stainless and refining investment plans.

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Trade diversification into Indo-Pacific

Ottawa is explicitly pursuing export-market diversification, with leadership travel and new strategic partnerships in Japan, India and Australia. This can open new demand for energy, technology and services, but requires investment in market entry, standards compliance, and geopolitical balancing.

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Pungutan ekspor CPO naik 12,5%

Mulai 1 Maret 2026, pungutan ekspor CPO dan beberapa turunan naik dari 10% menjadi 12,5% berdasarkan harga referensi. Industri memperkirakan tekanan harga CPO sekitar 3% dan TBS 7–8%. Kebijakan ini mengubah struktur biaya, strategi hedging, dan daya saing ekspor sawit.

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Digital sovereignty and regulated cloud

France is pushing sovereign cloud and tighter control of sensitive data for regulated sectors, reinforced by EU rules (AI Act, NIS2, DORA) and French qualification schemes. Multinationals may need EU-based processing, vendor changes, and new contracting for AI and cloud workloads.

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Energy policy shifts and bills

Ofgem’s April price cap is forecast to drop about £117 to ~£1,641, largely from Budget measures shifting 75% of Renewables Obligation costs to taxation and ending ECO after March 2026. Network charges are rising, influencing operating costs and industrial competitiveness.

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Data reform and AI governance divergence

UK data-use and access reforms and evolving AI governance may diverge further from the EU AI Act and GDPR interpretations. Multinationals should anticipate changing rules on lawful processing, automated decisioning, and cross-border data transfers, raising compliance and product localisation costs.

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Industrial relations tightening pressures

Mining majors warn expanded union powers are raising operational friction (BHP cites 400% rise in right-of-entry requests) and could deter capital spending. International operators should model productivity impacts, bargaining complexity and labour-hire cost pass-through.

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US–India tariff reset framework

A pending interim deal cuts US tariffs on many Indian goods to 18% (from 50%), while India pledges ~$500bn US purchases over five years. Expect sourcing shifts toward India, but watch execution risk, rules-of-origin, and sector carve‑outs.

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Kuota nikel dipangkas, impor naik

Pemangkasan RKAB nikel 2026 ke 260–270 juta ton (dari 379 juta pada 2025) menciptakan defisit pasokan hingga ~130 juta ton dan menurunkan utilisasi smelter ke 70–75%. Perusahaan dipaksa mengimpor, terutama dari Filipina, meningkatkan volatilitas biaya dan risiko keterlambatan produksi.