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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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Middle East Conflict Spillovers

Regional conflict is directly affecting Turkey’s trade and operating environment through energy volatility, weaker sentiment, and transport risk. The central bank warned geopolitical developments could create second-round inflation effects, while officials expect temporary damage to growth and the external balance.

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Agribusiness Export Resilience

Brazil remains well positioned in global commodities, with strong foreign interest linked to its exporter status and trade surplus support. A firmer real and sustained demand for agricultural and energy exports benefit producers, but can complicate competitiveness for manufacturers.

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Trade Agreements and Market Access

EU-Thailand FTA talks have completed 11 of 24 chapters, with both sides targeting conclusion this year. Progress matters because trade diversion from the EU-India deal and Thailand’s limited FTA network could erode export competitiveness in garments, seafood, and other price-sensitive sectors.

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FDI Rules Selective Liberalisation

India is easing some restrictions on investment from land-bordering countries by allowing up to 10% non-controlling stakes and proposing 60-day clearances in selected manufacturing sectors. The changes could improve venture and industrial capital inflows, especially in electronics, components, and strategic manufacturing.

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Supply Chain Diversification Penalties

New industrial and supply-chain security rules may penalize foreign firms if authorities judge relocation or sourcing changes as discriminatory toward China. Business chambers warn vague definitions and immediate implementation create legal uncertainty, complicating China-plus-one strategies and regional manufacturing reconfiguration.

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Cross-Strait Blockade Risk Escalates

Chinese military and coast guard activity around Taiwan has risen to nearly 100 vessels, while Taipei is running anti-blockade drills. Even limited inspections or exclusion zones could disrupt shipping, raise insurance costs, delay cargo, and destabilize regional supply chains.

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US Tariff Exposure Rising

Possible US reciprocal tariffs of up to 46% and tighter scrutiny of Chinese content in Vietnamese exports threaten key manufacturing sectors. Exporters may need faster origin verification, supplier diversification, and compliance upgrades to protect US market access.

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Energy Price and Security

Energy security has re-emerged as a core business risk after Middle East disruption pushed Germany’s 2026 growth forecast down to 0.5%. Higher oil, gas and raw-material costs are raising inflation, transport expenses and procurement volatility across manufacturing, logistics and chemicals.

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Tariff Regime Rebuilds Uncertainty

Washington is rebuilding broad tariff authority after the Supreme Court voided earlier emergency tariffs. New Section 301 probes cover economies representing 99% of U.S. imports and 16 partners accounting for 70%, raising cost, pricing and sourcing uncertainty for global firms.

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Red Sea Logistics Rewiring

Saudi Arabia is expanding alternative trade corridors through Neom, Red Sea ports and multimodal links, including 13 added shipping services and faster cargo release below 24 hours, reducing some chokepoint exposure while reshaping routing, warehousing and distribution strategies across the region.

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USMCA Review and Tariff Uncertainty

Canada faces acute uncertainty ahead of the July USMCA review as Washington keeps 50% tariffs on steel and aluminum and pressures Ottawa for concessions. The prolonged negotiation cycle is disrupting investment planning, cross-border sourcing, and North American production decisions.

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Energy Shock Transmission Risks

Middle East conflict and Hormuz-related disruption are pushing up oil, diesel, and shipping costs, with Brent near $95 in reporting. Higher fuel and petrochemical input prices are feeding through to transport, plastics, fertilizer, and aviation, squeezing margins across manufacturing, retail, and trade-intensive sectors.

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China Trade Stabilisation With Risks

Australia-China ties are improving, with both sides backing expanded trade, investment and possible upgrades to their free trade agreement. Yet dependence on China remains strategically sensitive, especially across LNG, mining and green industries, leaving businesses exposed to policy or geopolitical reversals.

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Policy Credibility and Regulatory Uncertainty

Investor confidence has improved under tighter orthodox policy, yet concerns persist over governance, central-bank independence and potential policy shifts ahead of politics. Companies should plan for changing macroprudential measures, liquidity rules and tax adjustments that can quickly alter local operating conditions.

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USMCA Tariffs Here to Stay

Washington has signaled automotive, steel and aluminum tariffs will persist through the 2026 USMCA review. Mexico sent over 2.8 million of 4 million vehicles produced in 2024 to the United States, so enduring duties will materially alter pricing, margins and investment planning.

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Amazon Climate and Carbon Regulation

Amazon deforestation fell to 5,796 km² in the year to July 2025, down 11.08%, while Brazil advances a regulated carbon market and sustainable taxonomy. This improves green-investment prospects, but stricter enforcement and integrity requirements will raise operating and due-diligence burdens.

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B50 Biofuel Reshapes Trade

Indonesia plans nationwide B50 biodiesel implementation from 1 July 2026, diverting about 5.3 million tons of CPO and aiming to eliminate roughly 5 million tons of diesel imports. The policy may tighten palm-oil export availability, alter energy trade flows, and affect food-versus-fuel pricing.

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Sanctions Expand Secondary Exposure

Washington is widening Iran-related secondary sanctions to banks, shippers, refiners, and intermediaries, including entities in China, Hong Kong, the UAE, and Oman. Companies now face higher compliance, shipping, insurance, and payment risks if counterparties touch sanctioned energy or logistics networks.

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Logistics Capacity Faces Squeeze

Transport and logistics operators report severe cost stress from fuel spikes, weak demand, and labor shortages, especially among SMEs. Germany is missing about 120,000 truck drivers, raising insolvency risks and threatening freight capacity, delivery reliability, and distribution costs across supply chains.

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Municipal Governance and Service Breakdown

Weak local governance continues to undermine business conditions through unreliable electricity, water insecurity, poor roads and procurement failures. Ramaphosa said municipalities budget under 1% for maintenance versus Treasury’s 8% benchmark, heightening operational disruption and business-flight risks.

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Trade Weaponization and Countermeasures

Beijing is expanding retaliatory trade tools beyond tariffs, including new anti-discrimination and anti-extraterritorial rules, tighter rare earth licensing, and powers to seize assets. These measures raise compliance risk, complicate diversification, and increase exposure for firms tied to U.S.-China disputes.

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IMF Reforms and Pricing

IMF-backed adjustment is reshaping operating costs through subsidy cuts, fuel hikes and more market-based pricing. March fuel prices rose by up to 17%, while industrial gas tariffs increased, affecting cement, steel, fertilizers, petrochemicals, transport economics and consumer demand.

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Oil Export Capacity Under Strain

Iran’s export system is under acute operational pressure as storage at Kharg Island tightens and tankers are used as floating storage. Analysts report exports down about 70% from March levels, raising risks of forced production cuts and unstable supply commitments.

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Fed Holds Higher-for-Longer Risk

The Federal Reserve is keeping policy tight as tariff and energy shocks complicate disinflation. March projections lifted 2026 PCE inflation to 2.7%, and prolonged oil disruption could add far more, implying sustained financing costs, stronger dollar pressures, and tougher conditions for investment planning.

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China Exposure and Strategic De-risking

German leaders are pushing tougher foreign investment protection, local-content rules and wider trade diversification as dependence on China, Russia and the US is reassessed. Businesses should expect stricter screening, supply-chain reconfiguration and greater emphasis on European sourcing in strategic sectors.

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Foreign investment boosting currency

Net foreign investment surged to about $39 billion in 2025 from $25 billion in 2024, reinforcing shekel appreciation and local asset demand. Strong inflows support liquidity and valuations, but intensify currency headwinds for export-oriented business models.

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Alliance Frictions Reshape Strategy

US-South Korea tensions over tariffs, burden-sharing, and Middle East cooperation are pushing the relationship toward a more transactional footing. Companies should expect policy unpredictability around market access, troop-cost politics, industrial commitments, and cross-border investment negotiations affecting long-term planning.

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Private Capital Into Infrastructure

Reform is gradually unlocking new investment channels. Eleven private rail operators have been awarded capacity, African Rail plans to raise $170 million for South African operations, and Afreximbank announced an $11 billion commitment spanning energy, logistics, mineral processing, and SME financing.

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Tariff Circumvention Drives Enforcement

Roughly $300 billion of tariffed goods are estimated to reach the U.S. via Southeast Asia and Mexico, with suspicious transactions up 76% in early 2025. That is increasing customs scrutiny, origin-verification risk, and exposure to penalties for companies relying on transshipment or complex multi-country assembly structures.

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Risco fiscal e arrecadação

O governo busca superávit primário em 2027 via maior arrecadação, revisão de incentivos e contenção de gastos. A receita líquida já alcançou R$ 2,57 trilhões, ou 18,3% do PIB, elevando incerteza sobre carga tributária, incentivos setoriais e previsibilidade regulatória.

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Regional Security Volatility Persists

Fragile ceasefires around Gaza, Lebanon and Iran remain unresolved, with recurring strikes and stalled negotiations raising the risk of renewed escalation. For businesses, this sustains elevated security, insurance and contingency-planning costs across trade, travel, logistics and fixed-asset investment decisions.

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Fuel import security shock

Middle East disruption has exposed Australia’s reliance on imported refined fuels, with around 80-90% imported and only two refineries operating. Higher diesel and petrol costs, shipment rerouting, and low reserves are raising inflation, logistics risk, and contingency planning needs.

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Expo 2030 Infrastructure Buildout

Construction has begun at the Expo 2030 Riyadh site, with infrastructure, design, and master-planning work accelerating and more countries confirming participation. The buildout should generate procurement, engineering, mobility, and urban-services opportunities while tightening execution and delivery requirements.

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Myanmar Border Trade Reopens

The reopening of a key Thailand-Myanmar trade bridge after months of closure should revive cargo flows, tourism and cross-border services. Businesses may benefit from improved route availability, but ongoing martial law, security risks and illicit-network activity still threaten border operations.

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Semiconductor Industrial Policy Expansion

Tokyo is scaling strategic chip support, including an additional ¥631.5 billion for Rapidus, bringing public R&D backing to roughly ¥2.35 trillion. This strengthens domestic supply-chain resilience and advanced-node ambitions, but subsidy dependence, customer acquisition, and execution risk remain significant for investors.

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Currency Strength, Export Competitiveness

The real has strengthened alongside high interest-rate differentials and commodity support, helping contain imported inflation and attracting financial inflows. For businesses, this lowers some import costs but can compress export margins, complicate hedging, and alter market-entry pricing strategies.