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Mission Grey Daily Brief - January 15, 2025

Summary of the Global Situation for Businesses and Investors

The global situation remains tense as geopolitical and economic tensions continue to escalate. The Russia-Ukraine war is now in its third year, with US officials warning of a possible Russian attack on the US and new sanctions being imposed on Russian oil producers and vessels to squeeze Russia's ability to finance the war. North Korea has fired multiple short-range ballistic missiles, condemned by South Korea and Japan, just days before the inauguration of US President-elect Donald Trump. Trump's pursuit of Greenland, a vast Arctic island with massive resource potential, has kicked into overdrive, with Trump refusing to rule out the use of military or economic force to make Greenland a part of the US. The US has removed Cuba from the terrorism blacklist, a significant development in US-Cuba relations.

Russia-Ukraine War

The Russia-Ukraine war continues to be a major concern for businesses and investors, as it enters its third year. US officials have warned of a possible Russian attack on the US, with cargo shipments catching fire at German, British, and Polish airports and warehouses, believed to be the work of Russian sabotage. The White House has expressed concern that the Russians are planning to bring their sabotage to the US, with aides to President Joe Biden sending a warning to Russian President Vladimir Putin. 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”.

New sanctions have been imposed on Russian oil producers and vessels, targeting Gazprom Neft and Surgutneftegas, Russia’s second- and fourth-largest oil producers, as well as 183 vessels transporting Russian oil and oil products to foreign markets. The sanctions aim to further squeeze Russia’s ability to finance its invasion of Ukraine, with oil being Russia’s most important source of revenue, accounting for more than a third of the federal budget. Britain has joined the United States in sanctioning the two oil companies, which combined produce more than 1 million barrels a day.

The sanctions are expected to drain billions of dollars per month from the Kremlin's war chest, intensifying the costs and risks for Moscow to continue its war in Ukraine. Ukrainian President Volodymyr Zelenskiy has thanked the United States and Britain for the new measures, expecting them to cut income for the Kremlin and restore peace.

North Korea Missile Launches

North Korea has fired multiple short-range ballistic missiles, condemned by South Korea and Japan, just days before the inauguration of US President-elect Donald Trump. 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 Acting President Choi Sang-mok has condemned the launch as a violation of United Nations Security Council resolutions and pledged an airtight posture. Japan's Chief Cabinet Secretary Yoshimasa Hayashi has also condemned the launch and pledged to take all possible measures to respond through close cooperation with Washington and Seoul, including real-time sharing of missile warning data.

The launch occurred during a visit to Seoul by Japanese Foreign Minister Takeshi Iwaya, with South Korean Foreign Minister Cho Tae-yul and Iwaya condemning North Korea's nuclear and missile development and pledging to boost security ties. U.S. Secretary of State Antony Blinken has called for further strengthening of bilateral and trilateral cooperation involving Tokyo to better counter North Korea's growing military threats.

The launch is seen as a show of force by North Korea, 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 have said 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.

Trump's Pursuit of Greenland

US President-elect Donald Trump's pursuit of Greenland, a vast Arctic island with massive resource potential, has kicked into overdrive, with Trump refusing to rule out the use of military or economic force to make Greenland a part of the US. Trump has described US ownership of the autonomous Danish territory as an "absolute necessity" for purposes related to "national security and freedom throughout the world", and has doubled down on those comments, refusing to rule out the use of military or economic force to make Greenland a part of the US.

Greenland's Prime Minister Mute Egede has told Trump that the Arctic island is "not for sale" and urged the international community to respect the territory's aspirations for independence. Alongside Danish Prime Minister Mette Frederiksen, Egede has called for talks with Trump to resolve the situation. Trump's incoming national security advisor, Rep. Michael Waltz, has said that the pursuit of Greenland is about critical minerals and natural resources, reintroducing America in the Western Hemisphere, and the 'America First' agenda.

Greenland is going to become more and more topical, with critical minerals and rare earth elements being vital components in emerging green technologies, such as wind turbines and electric vehicles, energy storage technologies, and national security applications. China is the undisputed leader of the critical minerals supply chain, accounting for roughly 60% of the world's production of rare earth minerals and materials. US officials have previously warned that this poses a strategic challenge amid the pivot to low-carbon energy sources.

US-Cuba Relations

The US has removed Cuba from the terrorism blacklist, a significant development in US-Cuba relations. The removal of Cuba from the terrorism blacklist is a positive step towards improving relations between the two countries, which have been strained for decades. The move could potentially lead to increased trade and investment opportunities for US businesses in Cuba, as well as improved diplomatic relations.

However, it is important to note that the removal of Cuba from the terrorism blacklist does not mean that all sanctions against Cuba have been lifted. The US still maintains a comprehensive embargo on Cuba, which restricts trade and investment opportunities for US businesses. Additionally, the US government has stated that it will continue to support the Cuban people in their pursuit of democracy and human rights.

Businesses and investors should closely monitor the developments in US-Cuba relations, as the removal of Cuba from the terrorism blacklist could potentially open up new opportunities for trade and investment in Cuba. However, it is important to remain cautious and aware of the ongoing political and economic challenges in Cuba, as well as the potential risks associated with investing in the country.


Further Reading:

Belarusian State TV Airs Propaganda Film Featuring Jailed RFE/RL Journalists - Radio Free Europe / Radio Liberty

Biden says he’s leaving Trump ‘strong hand to play,' defends his record on Afghanistan - Fox News

Brit Hume: The withdrawal from Afghanistan encouraged dictators in Beijing and Moscow - Fox News

Column: Trump wants to grab control of Greenland, Canada and the Panama Canal. He's already bungled it - Los Angeles Times

Lebanon Names ICJ Chief As Prime Minister In Latest Blow To Iran - Radio Free Europe / Radio Liberty

North Korea fires multiple short-range missiles off east coast, South says By Reuters - Investing.com

North Korea fires short-range ballistic missiles before Trump's return - Northeast Mississippi Daily Journal

Trump is fixated on Greenland — a vast Arctic island with massive resource potential - CNBC

U.S. removes Cuba from terrorism blacklist - The Weekly Journal

US officials reached out to Putin over fears of possible attack, report says - The Independent

Ukraine-Russia war latest: Kyiv launches massive drone and missile attack on Russian airbase and key targets - The Independent

Themes around the World:

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China Pivot Complicates Market Access

Ottawa’s January deal with Beijing, including lower barriers for up to 49,000 Chinese EVs and tariff relief on some Canadian agriculture, is widening strategic friction with Washington. Businesses face heightened policy, compliance, and geopolitical risk across autos, agri-food, and investment planning.

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Energy Policy and Power Reliability

State-led energy policy and pressure on private participation continue to cloud investment conditions in electricity, gas, and industrial supply. For manufacturers, this creates risks around project approvals, power reliability, input costs, and the scalability of nearshoring-driven capacity expansion.

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China Supply Chain Dependence Persists

Seoul and Beijing have reaffirmed cooperation on rare earths, urea, and other critical materials, highlighting Korea’s continued dependence on Chinese upstream inputs. Businesses face ongoing exposure to political frictions, export controls, and concentration risk in strategic manufacturing supply chains.

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Nearshoring momentum with bottlenecks

Mexico continues attracting strong nearshoring flows, with FDI reaching $40.9 billion in the first three quarters of 2025, up 14.5% year on year. Yet energy reliability, crime, logistics and policy uncertainty are constraining conversion of announced projects into operating capacity.

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Nuclear Talks Drive Policy Volatility

Ceasefire and nuclear negotiations remain fragile, with major gaps over uranium enrichment, sanctions relief, and frozen assets reportedly near $120 billion. Businesses face abrupt shifts in market access, compliance conditions, shipping rules, and political risk depending on whether diplomacy advances or collapses.

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Weak domestic demand persists

China’s headline growth remains supported by exports and infrastructure, but household demand is still fragile. First-quarter GDP rose 5%, while retail sales increased only 2.4%, limiting consumer-facing opportunities and raising the risk of prolonged deflationary pressure on corporate earnings.

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China Tech Export Controls

Washington is tightening semiconductor controls through the proposed MATCH Act, targeting DUV lithography tools, servicing, and allied-country compliance. The measures deepen U.S.-China technology decoupling, affect chip equipment supply chains, and raise compliance risk for multinationals operating across both markets.

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Judicial reform investor certainty

Mexico’s judicial overhaul is raising investor concerns over contract enforcement, regulatory disputes and rule-of-law predictability. U.S. officials have openly warned that judges must remain qualified and independent, as any perception of political or criminal influence could weaken capital inflows.

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Gigaprojects Face Reprioritization

Saudi authorities are reassessing flagship Vision 2030 projects, with spending discipline increasing under fiscal pressure and security shocks. Neom’s emphasis is shifting toward Oxagon, logistics, and practical industrial assets, affecting construction pipelines, suppliers, and long-term real-estate expectations.

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Nearshoring con cuellos logísticos

México sigue captando relocalización productiva, con IED récord y nuevas inversiones manufactureras, pero enfrenta límites operativos. Persisten cuellos de botella en energía, infraestructura y cruces fronterizos, aunque ambos gobiernos acordaron modernizar inspecciones y logística para reducir tiempos y mejorar competitividad.

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Power Reform, Grid Constraints

Electricity reform is advancing, with Eskom unbundling, wholesale market plans and fresh German financing, but grid shortages remain acute. Over 23,900MW is in connection processes, while only 270.8 km of new lines were built against a 423 km target.

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USMCA Review and Tariff Risk

Canada’s July USMCA review is drifting beyond deadline as Ottawa links renewal to relief from U.S. Section 232 tariffs on steel, aluminum, autos, lumber, and derivative goods. Prolonged uncertainty is delaying investment, raising cross-border costs, and disrupting integrated North American supply chains.

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Electricity Costs Still Elevated

Although supply has stabilised, tariff affordability is now a central business risk. Government aims to keep future increases in single digits, but electricity prices still pressure manufacturers, miners, and consumers, constraining margins, domestic demand, and competitiveness in energy-intensive export sectors.

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Nuclear Deal And Escalation Risk

Disputes over uranium enrichment, IAEA verification, and Iran’s stockpile of 60% enriched uranium keep the risk of renewed conflict elevated. A fragile interim arrangement would still leave major uncertainty over future sanctions, security conditions, and long-term investment viability.

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Europe Faces Refined Products Loophole

EU buyers still received 14 fuel cargoes in March from refineries in Turkey, India and Georgia using Russian crude feedstock. This refining loophole keeps Russian molecules in European supply chains, creating regulatory uncertainty for importers, commodity traders and downstream manufacturers.

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Rare earth leverage risk

China’s export licensing for rare earths and related materials has become a major commercial vulnerability. With China controlling roughly 60% of mining, above 90% of refining, and about 95% of permanent magnet production, downstream manufacturers face acute disruption risk.

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Aerospace deliveries face bottlenecks

Airbus delivered 114 aircraft in the first quarter but must average roughly 84 monthly deliveries to reach its 870-plane 2026 target. Engine shortages, especially from Pratt & Whitney, remain a material risk for exporters, suppliers, and regional industrial activity.

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Fragile Food and CO2 Supply

Government contingency planning warned that prolonged disruption in the Strait of Hormuz could reduce UK CO2 supplies to 18% of current levels, affecting meat processing, packaging, brewing, healthcare, and cold chains. The episode highlights acute supply vulnerabilities across essential business operations.

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Monetary Tightening Hits Financing

The State Bank raised its policy rate by 100 basis points to 11.5%, warning inflation could enter double digits and stay above target through much of FY27. Higher borrowing costs will constrain corporate expansion, working capital, consumer demand and leveraged investment strategies.

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Trade Policy and Strategic Screening

Germany is backing a more defensive European trade posture amid tariff pressure, unfair-competition concerns and strategic dependency risks. Policymakers favor stronger investment screening, local-content preferences and diversified trade agreements, shaping market access, M&A reviews and sourcing decisions for foreign firms.

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BEE Rules Shape Market Access

Black economic empowerment requirements remain a decisive regulatory variable for foreign investors, particularly in telecoms and licensing-heavy sectors. Delays over recognising equity-equivalent investment programmes signal policy friction inside government, prolonging compliance uncertainty, slowing market entry, and complicating transaction structuring.

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Currency Strength, Mixed Effects

The real has strengthened and 2026 dollar forecasts improved to around R$5.30, supported by capital inflows and commodity revenues. This eases imported inflation and lowers some input costs, but can erode export competitiveness for industrial and labor-intensive sectors.

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Tariff Circumvention Enforcement Intensifies

US authorities are scrutinizing transshipment through Mexico and Southeast Asia more aggressively. Altana estimates roughly $300 billion in tariffed goods avoid levies annually, while suspect transactions rose 76% in the first 10 months of 2025, increasing customs, audit, and origin-verification risks.

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Automotive Transition Policy Pressures

The government is lobbying Brussels for softer combustion-engine and fleet-emission rules to shield German carmakers from penalties, reflecting pressure from weak EV competitiveness and Chinese rivals. Suppliers face prolonged regulatory uncertainty over product mix, compliance costs and investment timing.

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Investor Confidence Still Fragile

South Africa fell five places to 12th in Kearney’s developing-market investment ranking as concerns persist over governance, infrastructure, logistics, and policy delivery. Large headline pledges contrast with modest realized inflows, reinforcing caution around project execution and medium-term returns.

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Labor shortages and migration friction

Germany still faces structural labor shortages, yet migration and repatriation debates risk discouraging skilled foreign workers. Tighter rhetoric and administrative frictions could worsen shortages in healthcare, technical trades, and industry, increasing hiring costs and constraining operational scaling.

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Critical minerals supply-chain surge

Australia and the United States have committed more than A$5 billion to critical minerals projects, supporting rare earths, nickel, graphite, tungsten and gallium. This strengthens non-China supply chains, expands processing investment, and creates new opportunities in mining, refining, technology and defence industries.

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Labor Shortages Constrain Operations

Tighter immigration enforcement is worsening labor shortages in restaurants, agriculture, hospitality, and manufacturing-adjacent sectors, with manufacturing vacancies estimated near 394,000 to 449,000. For investors and operators, workforce scarcity is becoming a direct constraint on expansion, service reliability, and the pace of domestic supply-chain localization.

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Foreign Investment Momentum Strengthens

Approved foreign direct investment reached THB324 billion in 2025, up 42% year on year and extending five consecutive years of growth. Semiconductor, cloud and AI investments, including Microsoft’s US$1 billion plan, reinforce Thailand’s appeal for regional manufacturing and digital operations.

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Shadow Fleet Compliance Exposure

Iran relies heavily on opaque shipping structures, AIS spoofing, front companies and multi-flag tanker networks spanning jurisdictions such as Panama, Cameroon and the Marshall Islands. For insurers, ports, traders and charterers, beneficial-ownership screening and cargo-traceability risks are rising materially.

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Agriculture Input Vulnerability

Fertiliser shortages and higher input prices are creating acute risk for Thailand’s farm sector and food exports. Officials are seeking 1-2 million tonnes of Russian urea, while research suggests cost shocks could reduce output by 21% and farmer incomes by 19%.

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Foreign Investment Rules Tightening

Australia remains open to strategic capital, especially from trusted partners, but investments in critical minerals, defence-related assets and infrastructure face closer national-interest scrutiny. FIRB review and security conditions can prolong deal timelines, affecting mergers, project financing and cross-border partnership structuring.

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Steel and Metals Trade Shock

Mexico’s steel industry has dropped to 55% capacity utilization, with exports down 53% in 2025 and finished steel output down 8.1%. US duties of 50% on basic metals and 25% on derivatives threaten manufacturing inputs and industrial supply chains.

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State-backed battery supply chain

France is accelerating EV industrial policy through lithium mining, cathode materials, and component investments. Imerys targets 34,000 tonnes of lithium hydroxide annually from 2030, while tax credits and fast-tracked permits support battery manufacturing localization and supply security.

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Semiconductor Concentration Drives Exposure

Taiwan remains central to advanced chip production, supplying more than 90% of leading-edge semiconductors. TSMC reported record first-quarter profit of T$572.5 billion and raised guidance, but overseas expansion and export-control tensions are reshaping investment geography, customer strategies, and supply-chain contingency planning.

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Freight Logistics Reform Delays

Rail and port bottlenecks remain South Africa’s biggest trade constraint, with freight-logistics reform momentum falling 4% in Q1. Rail moves only about 165 million tonnes against 280 million tonnes demand, raising export costs, delaying shipments, and complicating inventory planning.