Mission Grey Daily Brief - January 25, 2025

Summary of the Global Situation for Businesses and Investors

The world is facing a number of significant geopolitical and economic challenges. Donald Trump's attempt to buy Greenland has sparked debate and raised concerns about the future of the territory. Meanwhile, Trump's tariff threats against Canada and Mexico have caused fear of a potential trade war and economic damage to these countries. In West Africa, military governments in Mali, Burkina Faso, and Niger are increasing pressure on foreign firms, while Storm Eowyn has caused power cuts and transport chaos in the UK and Ireland. Lastly, the election in Belarus is likely to extend the rule of the country's long-standing dictator. These events have the potential to impact businesses and investors globally, and it is crucial to stay informed and prepared for any potential risks or opportunities that may arise.

Donald Trump's Tariff Threats

Donald Trump has threatened to impose 25% tariffs on all goods from Canada and Mexico on February 1, citing concerns over border security. This move could risk starting a full-blown trade war within the deeply interconnected North American economy, with massive implications for the entire continent. Economists predict that the tariffs would swiftly send the Canadian and Mexican economies into recession and lift consumer prices for Americans on cars, gasoline, and other imported items. However, some analysts believe that Trump is bluffing, as starting a trade war would undermine his promises to boost the US economy and tackle the cost of living. It is possible that Trump may opt not to impose the tariffs, especially if Canada and Mexico agree to renegotiate the US-Mexico-Canada Agreement (USMCA) this year.

Donald Trump's Attempt to Buy Greenland

Donald Trump is set to meet with Greenland's Prime Minister to discuss the potential purchase of the country, despite strong opposition from Denmark. Greenland is a vital strategic asset with abundant natural resources and sits in the middle of the main Arctic trade routes, an area of growing competition between international superpowers. Russia and China have increased their efforts to control the region, and there are concerns that the US has been caught off-guard. Greenland's Prime Minister has expressed willingness to speak with Trump and is working to arrange a meeting soon. However, Denmark has been firm in its stance that Greenland is not for sale and has its own ruling body.

Storm Eowyn Hits UK and Ireland

Storm Eowyn has caused power cuts and transport chaos in the UK and Ireland, with 42,000 area residents working in blue-collar jobs in the UK and 1.2 million people employed in the Irish economy. The storm has disrupted power supplies, leading to blackouts and power cuts in both countries. Transport networks have also been affected, with train and bus services disrupted and some roads closed due to flooding and fallen trees. The storm has caused significant damage to infrastructure, with some areas experiencing power outages for several days. This event highlights the vulnerability of critical infrastructure to extreme weather events and the need for businesses and governments to invest in resilience and adaptation measures.

Military Governments in West Africa

In West Africa, military governments that took power in Mali, Burkina Faso, and Niger since 2020 are increasing pressure on foreign firms, demanding higher taxes and royalties and threatening to revoke licenses and permits. This escalation of tensions has raised concerns among foreign investors and could have significant implications for businesses operating in the region. The military governments' actions are likely driven by a desire to assert control over natural resources and increase revenue for their countries. However, these actions could have unintended consequences, such as driving away foreign investment and undermining economic growth and development in the region. Businesses operating in West Africa should closely monitor the situation and consider strategies to mitigate potential risks, such as diversifying their operations and engaging in dialogue with local stakeholders.

Themes around the World:

Industrial and Technological Investment Surge

France is witnessing major investments in aerospace, steel decarbonization, data centers, and sustainable manufacturing. Projects totaling billions of euros aim to create thousands of jobs, modernize infrastructure, and strengthen France’s position in global supply chains.

Foreign Direct Investment Reboot

Thailand is prioritizing high-value FDI in sectors like high-tech, green infrastructure, and wellness tourism. Streamlined investment processes and improved incentives aim to reverse declining FDI, but success depends on legal reforms, transparency, and stable governance.

Sustainable Energy and Rural Electrification

Indonesia targets nationwide electrification by 2030, with significant progress in rural areas. The Desa Listrik program and new installations promote social equity and unlock economic opportunities, supporting investment in energy, technology, and rural development.

Geopolitical Role in Black Sea Security

Turkey is assuming a leadership role in Black Sea naval security missions amid the Russia-Ukraine conflict, enhancing regional maritime safety. This strategic position strengthens Turkey’s influence in NATO and impacts trade routes, logistics, and risk assessments for international operators.

Logistics, Ports, and Regional Trade Corridors

Israel is leveraging its geographic position to become a regional logistics and digital hub, with new port, rail, and trade corridor projects connecting Asia, Europe, and the Middle East. Success depends on regional stability, infrastructure investment, and competition with Turkey and Gulf states, affecting supply chain strategies.

Trade Diversification Amid US Tariffs

Despite increased US tariffs, South Korea has diversified its export markets, expanding shipments to ASEAN, the EU, and India. This strategy reduces vulnerability to US policy shifts and enhances resilience in the face of rising global protectionism, impacting trade flows and investment decisions.

Foreign Investment Policy Tightens

Saudi Arabia is refining its foreign investment regulations, balancing openness with strategic national interests. Enhanced compliance, local content requirements, and sectoral restrictions may affect market entry, ownership structures, and profit repatriation for international investors.

Sanctions Severely Restrict Oil Revenues

International sanctions have blocked 38% of Iran’s oil revenue from returning, with only $13 billion of $21 billion in sales received. This undermines government finances, disrupts budget planning, and increases risk for foreign investors and supply chain partners.

Nearshoring and Supply Chain Shifts

Mexico continues to attract nearshoring investment, especially in manufacturing and AI hardware assembly, as global firms seek resilient supply chains. However, rising wages, regulatory hurdles, and competition from Central America challenge Mexico’s cost advantage and long-term positioning.

International Security Guarantees for Ukraine

Ukraine’s allies, including the US, France, and UK, are finalizing robust security guarantees and peacekeeping arrangements. These legal commitments aim to deter future Russian aggression and stabilize the business environment, crucial for investor confidence and long-term operations.

Defense Technology as Economic Anchor

Israel’s defense-tech sector has become a key diplomatic and economic asset, attracting major foreign investment and strategic partnerships, especially from Europe. This shift bolsters Israel’s global influence but also ties its economic resilience to the volatile defense sector.

Global Energy Market Realignment

Sanctions, falling oil prices, and Ukrainian attacks have pushed Russian oil exports to their lowest since 2022, with Urals crude dropping below $35 per barrel. Russia’s market share in India and China is shrinking, and clandestine shipping is rising, increasing operational risk for energy traders.

Persistent Geopolitical and Security Risks

Ongoing conflict with Ukraine, intensified attacks on Russian infrastructure, and evolving sanctions regimes create persistent uncertainty for international business operations, with heightened risk of further disruptions to trade, logistics, and investment.

Foreign Direct Investment Fluctuations

UK outbound investment, particularly in Europe, has sharply declined—UK investment in Spain fell 83% in 2025. While the UK promotes itself as an attractive investment destination, these fluctuations signal caution for international investors assessing long-term commitments.

Strategic Alignment with China Amid Global Shifts

Pakistan’s deepening strategic partnership with China, marked by high-level dialogues and expanded cooperation in technology, space, and finance, is reshaping its economic and geopolitical orientation. This alignment is pivotal for infrastructure, trade, and regional stability but may complicate relations with Western partners.

US-China Trade Tensions Escalate

The US has imposed a 25% tariff on countries trading with Iran, directly targeting China, Iran’s largest oil buyer. This move risks reigniting the US-China trade war, disrupting global supply chains, and increasing costs for multinational businesses. China’s response and supply chain rerouting are already evident, with US-China trade down 28-38% in 2025 and Southeast Asia gaining share.

Forestry Investments Expand Internationally

Interest in Swedish forestry assets is rising, with investors also targeting Finland and Latvia for similar growth at lower prices. This trend reflects the sector’s stability and its role in sustainable supply chains, attracting cross-border capital flows.

Energy Infrastructure And Mineral Scarcity

US energy transition faces hardware constraints, including transformer and copper shortages, and dependence on Asian imports. Private energy islands and methane pyrolysis are emerging, but mineral security and grid bottlenecks threaten reliability and cost for global supply chains.

Comprehensive Reform Momentum Accelerates

India's 2025-26 reform wave—GST 2.0, new Income Tax Act, labour codes, FDI liberalization, and legal modernization—has improved compliance, reduced business costs, and boosted investor confidence, creating a more predictable, competitive, and growth-oriented environment for international businesses.

Strategic US-Japan Alliance Coordination

The trade dispute tests US support for Japan, with Tokyo seeking closer coordination with Washington and G7 partners. The evolving alliance dynamics influence regional stability, investment decisions, and the global technology ecosystem.

Fragmentation Of Global Governance

US disengagement from multilateral institutions fosters a shift toward regional and bilateral diplomacy. This fragmentation undermines global standards, increases regulatory uncertainty, and forces international businesses to navigate diverging climate, trade, and digital frameworks.

Horn of Africa Recognition and Geopolitical Expansion

Israel’s recognition of Somaliland signals a strategic push into the Horn of Africa, aiming for access to key maritime corridors and security partnerships. This move risks regional destabilization, affecting trade routes, supply chains, and investment prospects for businesses operating across Africa and the Middle East.

Fragile Ceasefire and Humanitarian Challenges

Despite a ceasefire agreement in Gaza, repeated violations and severe humanitarian crises persist. International pressure and UN findings of genocide affect Israel’s reputation, regulatory environment, and risk profile for global investors and supply chain operators.

Energy Transition and Policy Uncertainty

Despite federal efforts to revive fossil fuels, market forces and state policies have driven record renewable energy growth. However, abrupt regulatory changes, project cancellations, and legal disputes have created a volatile investment climate, especially in wind, solar, and EV supply chains.

Regulatory Reforms and Investment Climate

The government is pursuing regulatory reforms to attract foreign and domestic investment, including tax incentives and streamlined credit for SMEs. However, inconsistent policies, high production costs, and compliance challenges remain barriers to sustained investment and supply chain integration.

Complex China-Australia Relationship Persists

Despite trade frictions, China remains Australia’s largest trading partner. Bilateral relations have stabilized post-2022, but strategic tensions over security, critical minerals, and regional influence continue to shape business risk and investment decisions.

Investment Decline and Industrial Stagnation

Russia’s investment activity is falling, with an 8.7% drop in machinery and equipment imports. Industrial modernization is stalling, and GDP growth has slowed to just 0.1%, signaling recession risks and diminishing prospects for foreign investors.

Geopolitical Realignment and Indo-German Partnership

Germany is deepening its strategic partnership with India, signing 19 agreements on defense, technology, critical minerals, and green energy. This realignment aims to reduce reliance on China and Russia, enhance supply chain resilience, and position Germany as a key player in the Indo-Pacific region.

Migration Pressures and Social Stability

Ongoing conflicts in Syria and the broader region drive significant migration into Turkey, straining public services and increasing social tensions. These pressures can affect labor markets, consumer demand, and operational risks for international businesses operating in Turkey.

Sanctions, Export Controls, and Compliance Risk

The US is intensifying sanctions enforcement, especially on Iran and entities linked to protest crackdowns. New secondary sanctions and export controls, including on advanced technology, raise legal and operational risks for global businesses, requiring robust compliance systems and constant monitoring of regulatory changes.

Trade Growth Lagging Global Average

UK trade is projected to grow at 2.3% annually over the next decade, below the global average of 2.5%. Deepening ties with the EU and other rule-based economies is seen as crucial to reversing this trend, as trade with the US and China stagnates due to geopolitical tensions.

Strategic Infrastructure and Chabahar Port

Despite sanctions, Iran continues developing the Chabahar Port and North-South Transport Corridor, vital for regional connectivity and trade with India, Russia, and Central Asia. However, instability and external pressure threaten project timelines and long-term investment returns.

State-Level Competition for Investment

States like Andhra Pradesh, Odisha, and Maharashtra are aggressively attracting investment, with Andhra Pradesh capturing 25.3% of proposed investments in FY26. This regional competition, driven by policy clarity and infrastructure, is reshaping India’s industrial geography and offering new opportunities for international investors.

Commodity Export Volatility

South Africa’s economy benefits from strong performance in mining and agriculture, with rising metal prices and a robust rand supporting exports. However, global commodity price fluctuations and logistical bottlenecks pose risks to export revenues and supply chain resilience.

Corruption And Governance Challenges

State corruption remains a major concern, with high-profile investigations into tender fraud and police misconduct. Ongoing scandals undermine public trust, complicate regulatory compliance, and increase operational risks for international businesses seeking transparency and stability.

Resilient but Diversifying Trade Structure

Despite higher US tariffs and global headwinds, China’s exports grew 6.1% in 2025, with diversification toward ASEAN, Latin America, and Africa. High-tech products now drive export growth, but external demand uncertainty and protectionism remain significant risks for international investors.