Mission Grey Daily Brief - January 14, 2025

Summary of the Global Situation for Businesses and Investors

The global situation remains highly volatile, with several geopolitical and economic developments that could impact businesses and investors. The US-Russia relationship continues to be strained, with US officials warning Russia against bringing the war in Ukraine to the US. Meanwhile, Russia has accused the US of destabilising global markets with sanctions on the Russian energy sector. In the Middle East, Saudi Arabia is pushing for the lifting of sanctions on Syria to support the country's reconstruction, while Turkey is urging a balanced approach. In Asia, North Korea has fired multiple short-range missiles, raising tensions in the region. Lastly, Russia is eyeing Libya as a potential military substitute for Syria, but Libyans are resisting this move.

US-Russia Tensions

The US-Russia relationship remains tense, with US officials warning Russia against bringing the war in Ukraine to the US. According to a New York Times report, aides to President Joe Biden sent a warning to Russian President Vladimir Putin after they feared that the Russians may attempt to bring the war in Ukraine to the US. This summer, cargo shipments began to catch fire at German, British, and Polish airports and warehouses, and both Washington and the Europeans believed that the Russians were responsible. In August, the White House grew concerned that the Russians were also planning to bring their sabotage to the US, according to secretly obtained intelligence. Aides to Biden reportedly reached out to Putin via Russian officials to put an end to sabotage at European airports and warehouses. Homeland Security Secretary Alejandro Mayorkas put in place new screening restrictions on cargo bound for the US in August. When the warnings once again arose in October, Mayorkas pushed the executives at the largest airlines flying into the US to take further measures to make sure there wasn’t a disaster in the middle of a flight. White House officials were not sure whether Putin had ordered the plot or if he even was aware. It was possible he had not been made aware, but at this point, a major effort was started to push him to put an end to it. Similarly to when the US believed Russia was considering using a nuclear weapon in Ukraine in October 2022, Biden sent National Security Adviser Jake Sullivan and C.I.A. Director William Burns to warn Putin’s aides. The warning stipulated that if Russia’s sabotage led to a mass casualty event in the air or on the ground, the US would hold Russia accountable for “enabling terrorism.” While Sullivan and Burns didn’t state what shape the response would take, they did say it would mean that the shadow war between Russia and the US would reach new heights.

Russia-Ukraine War

The Russia-Ukraine war continues to be a major concern for the global community. On Monday, the Kremlin said that the latest round of US sanctions on the Russian energy sector risked destabilising global markets. Kremlin spokesman Dmitry Peskov said, “It is clear that the United States will continue to try to undermine the positions of our companies in non-competitive ways, but we expect that we will be able to counteract this. At the same time, of course, such decisions cannot but lead to a certain destabilisation of international energy markets, oil markets. We will very carefully monitor the consequences and configure the work of our companies in order to minimise the consequences of these … illegal decisions.” The US and its allies have imposed sanctions on Russia's energy sector in response to its invasion of Ukraine, which has led to a significant reduction in Russia's oil and gas exports. This has resulted in a decline in Russia's energy revenues, which could potentially impact its ability to fund the war effort in Ukraine.

North Korea Missile Launches

North Korea has fired multiple short-range missiles off its east coast, raising tensions in the region. The missiles travelled about 250 km (155 miles) after lifting off at around 09:30 am (0030 GMT) from Kanggye, Jagang Province, near the country's border with China. South Korea's military said that the launch marked Pyongyang's latest show of force just days ahead of US President-elect Donald Trump's return to office. South Korea's Acting President Choi Sang-mok condemned the launch as a violation of United Nations Security Council resolutions and said Seoul would sternly respond to North Korea's provocations. Japan's Chief Cabinet Secretary Yoshimasa Hayashi said he was aware of the missile test, and Tokyo was taking all possible measures to respond through close cooperation with Washington and Seoul, including real-time sharing of missile warning data. The launch came about a week after the North fired what it claimed was a new intermediate-range hypersonic ballistic missile, which was its first missile test since Nov. 5. South Korean Foreign Minister Cho Tae-yul and Japanese Foreign Minister Takeshi Iwaya condemned the North's nuclear and missile development on Monday and pledged to boost security ties following talks in Seoul. U.S. Secretary of State Antony Blinken, while visiting Seoul last week, also called for further strengthening of bilateral and trilateral cooperation involving Tokyo to better counter Pyongyang's growing military threats. Tuesday's launch occurred days before the inauguration of Trump, who held unprecedented summits with North Korean leader Kim Jong Un during his first term and has touted their personal rapport. South Korean lawmakers, after being briefed by the National Intelligence Service, said on Monday that Pyongyang's recent weapons tests were partly aimed at "showing off its U.S. deterrent assets and drawing Trump's attention" after vowing "the toughest anti-U.S. counteraction" at a key year-end policy meeting last month.

Russia's Interest in Libya

Russia is eyeing Libya as a potential military substitute for Syria, but Libyans are resisting this move. Russia has been a key player in the Syrian civil war, providing military support to the Assad regime. However, with the fall of President Bashar Assad and the emergence of a new interim government in Syria, Russia is looking for alternative military bases in the region. Libya, which has been in a state of political and military turmoil since the fall of Muammar Gaddafi in 2011, is seen as a potential candidate. However, Libyans are wary of Russia's intentions and are resisting its attempts to establish a military presence in the country. Libyan officials have stated that they will not allow Russia to use their country as a military base and have called on the international community to support their efforts to maintain their sovereignty and territorial integrity.

Themes around the World:

Budget 2026 capex-led growth

Union Budget 2026–27 targets a 4.3% fiscal deficit with ₹12.2 lakh crore capex, prioritizing roads, rail corridors, waterways, and urban zones. Expect improved project pipelines and demand, but also procurement scrutiny and execution risk across states.

Crackdown on grey capital

Industry leaders are urging tougher action against scams, money laundering and “grey capital,” warning reputational and compliance risks if Thailand is seen as a laundering hub. Expect tighter KYC/AML enforcement, more scrutiny of cross-border payments, and operational impacts for fintech and trade.

Secondary tariffs and sanctions extraterritoriality

Washington is expanding secondary measures, including tariffs on countries trading with Iran and pressure on partners over Russia-linked commerce. This raises third-country compliance burdens, increases tracing requirements across multi-tier supply chains, and elevates retaliation and WTO-dispute risks for multinationals.

Industriekrise und Exportdruck

Deutschlands Wachstum bleibt schwach (2025: +0,2%; Prognose 2026: +1,0%), während die Industrie weiter schrumpft. US-Zölle und stärkere Konkurrenz aus China belasten Exporte und Margen; Investitionen verlagern sich, Lieferketten werden neu ausgerichtet und Kosten steigen.

Currency volatility and multiple rates

Exchange‑rate distortions and attempted unification efforts have fueled dollar demand and rial depreciation, amid allegations of delayed oil‑revenue repatriation. This elevates pricing uncertainty, contract renegotiations, and payment risk for importers/exporters, and strengthens grey‑market channels for procurement and settlement.

Security, service delivery, labour disruption

Persistent crime and intermittent municipal service breakdowns—waste collection stoppages, water-utility strikes, and power-substation incidents—create operational risk for sites, staff mobility and last-mile distribution. Businesses increasingly budget for private security, redundancy, and contractual force-majeure safeguards.

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.

Trade diversification via EU–CPTPP bridge

Ottawa is spearheading talks to link CPTPP and the EU through rules-of-origin cumulation, aiming to create lower-tariff, more flexible supply chains spanning roughly 1.5 billion consumers. If realized, it could reduce U.S. dependency and re-route investment toward export platforms.

Trade–security linkage in nuclear submarines

Tariff friction is delaying alliance follow-on talks on nuclear-powered submarines, enrichment, and spent-fuel reprocessing. Because trade and security are being negotiated in parallel, businesses face headline risk around dual-use controls, licensing timelines, and defense-adjacent supply chains.

Central bank pivot and rate path

The Bank of Thailand is shifting from rate-only signalling toward broader measures targeting productivity and inequality, while maintaining accommodative policy. Analysts expect a possible cut toward 1.00% in early 2026. Lower rates help borrowers but may not revive investment without reforms.

IMF program, refinancing pressure

Pakistan’s near-term macro path hinges on the IMF EFF/RSF reviews and continued rollovers from China, Saudi and UAE. Falling reserves (about $15.5bn) and a $1.3bn Eurobond due April 2026 elevate convertibility, payment and counterparty risk.

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.

Gargalos portuários e competição

Portos bateram 1,4 bi t em 2025 (+6,1%), mas Santos enfrenta risco de colapso sem expansão; o Tecon Santos 10 segue com disputas regulatórias e risco de judicialização. Atrasos elevam demurrage, perdas logísticas e confiabilidade de exportação/importação de cargas conteinerizadas.

Mining law and licensing uncertainty

The Mineral Resources Development Amendment Bill has been criticized for ambiguity, while debates over BEE conditions, beneficiation and application timelines continue. Exploration spend fell to about R781m in 2024 (from R6.2bn in 2006), constraining future output and investor appetite.

Monetary policy amid trade uncertainty

With inflation around 2.4% and the policy rate near 2.25%, the Bank of Canada is expected to hold rates while tariff uncertainty clouds growth and hiring. Financing costs may stay elevated; firms should stress-test cash flows against demand shocks and FX volatility.

Aceros, autos y reglas origen

México busca eliminar aranceles “disfuncionales” a acero/aluminio y armonizar criterios para autos en la revisión del T‑MEC. Cambios en contenido regional y cumplimiento elevarían costos de certificación, reconfigurarían proveedores y afectarían márgenes de OEMs y Tier‑1.

EU market access with green compliance

An India–EU FTA conclusion and stricter EU climate/traceability tools (e.g., CBAM-type reporting) increase both access and compliance burdens for exporters in steel, aluminum, chemicals and textiles. Firms should invest in emissions data, auditing, and supplier traceability.

Digital-government buildout and procurement

Government is accelerating cloud/AI adoption and “digital cleanup,” with digital-government development budget cited near 10bn baht for FY2027 and agencies targeting much higher IT spend. Opportunities rise for cloud, cybersecurity, and integration vendors, alongside procurement and interoperability risks.

Supply-chain exposure to sectoral probes

Even as some broad tariffs were struck down, U.S. Section 232 investigations into additional sectors (e.g., aircraft, critical minerals, pharmaceuticals) keep Canadian exporters at risk. Companies should scenario-plan for sudden duty changes, certification requirements and localization pressures.

EU trade defenses and retaliation

EU countervailing duties on China-made EVs are evolving into minimum-price, quota, and EU-investment “undertakings,” while Beijing retaliates with targeted tariffs (e.g., 11.7% on EU dairy). Firms face higher compliance costs, pricing constraints, and fast-moving dispute risk.

H-1B tightening and talent costs

New wage-weighted H-1B selection and a $100,000 fee for many new petitions raise labor costs and reduce predictability for global staffing. Multinationals may shift to L-1 transfers, expand offshore delivery centers, and adjust U.S. project timelines and location strategies.

Bölgesel yeniden inşa ve altyapı ihaleleri

Deprem bölgesinde ulaşım hatları ve sanayi bağlantılarını güçlendiren yeni demiryolu projeleri (ör. Nurdağı–Kahramanmaraş) planlanıyor. Bu, inşaat, lojistik, çimento-çelik ve makine ekipman talebini artırırken; ihale şartları, finansman ve yerel kapasite kısıtları risk yaratabilir.

Energy security and LNG dependence

Taiwan’s heavy reliance on imported fuels makes LNG procurement, terminal resilience, and grid stability strategic business variables. Cross-strait disruptions could quickly constrain power supply for fabs and data centers; policy debate over new nuclear options signals potential regulatory and investment shifts.

Long-term LNG contracting, energy security

Jera signed a 27-year deal with QatarEnergy for 3 mtpa LNG from 2028; Japan imported 66.15m tons in 2023. More long-term contracting supports power reliability for data centers and chip fabs but locks in fossil exposure and price-index risks.

Industrial decarbonisation via CCUS

The UK is moving carbon capture from planning to build-out: five major CCUS projects reached financial close, with over 100 projects in development and potential 100+ MtCO₂ storage capacity annually by mid‑2030s. Policy clarity and funding pace will shape investment, costs, and competitiveness for heavy industry.

USMCA review and tariff volatility

Mandatory USMCA review by July 1 is becoming contentious; Washington is openly weighing withdrawal and has threatened extreme tariffs and sector levies. Heightened uncertainty disrupts pricing, contract terms, and cross-border auto, metals, agriculture, and services supply chains.

Industrial digital twins for energy

Finland’s energy-transition projects and grid investments are increasing uptake of simulation for power systems, heating networks and decarbonization planning. This supports consulting and software exports, but also elevates requirements for data quality, model validation, and regulatory-aligned reporting.

Data protection compliance tightening

Draft DPDP rules and proposed faster compliance timelines raise near-term operational and legal burdens, especially for multinationals and potential “Significant Data Fiduciaries.” Unclear thresholds and cross-border transfer mechanisms increase compliance risk, contract renegotiations, and potential localization-style costs.

Corredores logísticos e licenciamento

Concessões e projetos de hidrovias e portos ganham tração, mas enfrentam licenciamento ambiental e contestação social. A Hidrovia do Rio Paraguai mira leilão até 2026 e pode elevar cargas de 8,8 para 30 Mt, reduzindo fretes do agro.

Workforce bottlenecks in SHK trades

Skilled‑labor shortages in sanitary/heating/AC and related vocational pipelines constrain installation rates for heat pumps and network connections. For international firms, the bottleneck shifts value toward training partnerships, prefabrication, and service models—while increasing project delivery risk and warranty exposure.

BOJ tightening, yen volatility

Markets now price BOJ hikes toward 1% by mid-2026, while officials signal readiness to curb disorderly FX moves near ¥160/$, raising hedging costs and earnings volatility for exporters, importers, and Japan-based treasury centers managing multi-currency supply chains.

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.

Disinflation Path and Rates

The CBRT and IMF signal continued disinflation but still-high prices: inflation fell from 49.4% (Sep 2024) to 30.9% (Dec 2025), with end‑2026 seen near ~23%. Policy-rate cuts remain gradual, shaping demand, credit, and business financing costs.

Regulatory shocks at borders

Abrupt implementation of Decree 46 food-safety inspections stranded 700+ consignments (~300,000 tonnes) and left 1,800+ containers stuck at Cat Lai port, exposing clearance fragility. Firms should plan for sudden rule changes, longer lead times, higher testing costs and contingency warehousing.

Regulatory tightening in housing finance

Bank of Israel measures cap mortgage maturities at 30 years, tighten repayment ratios, and raise bank capital requirements. This can cool real-estate demand, affect construction supply chains, and influence commercial leasing dynamics as households and developers adjust financing structures and cash flows.

Local government debt tightening

Provincial reports signal stricter controls on “hidden” local debt, platform exits, and goals to clear stock by 2026, reinforcing Beijing’s ‘no new implicit debt’ stance. Expect slower infrastructure pipelines, tougher public procurement terms, and heightened scrutiny of SOE financing structures.