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.
Further Reading:
Power cuts and transport chaos as Storm Eowyn hits Ireland and UK - Citizentribune
Storm Eowyn: What we know so far - Sky News
Trump could do incredible damage to Mexico and Canada with a single signature - CNN
Themes around the World:
Political Stability and Governance
Domestic political stability and governance quality are critical for sustained economic growth and investor confidence. Political risks, including social unrest or policy shifts, can affect market conditions and business continuity in Egypt.
Digital Economy Expansion
Rapid growth in Indonesia's digital economy, driven by e-commerce and fintech, opens new avenues for investment and market access. This trend encourages innovation but also requires adaptation to evolving regulatory frameworks governing data and digital transactions.
Selective Openness and Strategic Free Trade Zones
The launch of Hainan as the world’s largest free trade port exemplifies China’s approach to selective openness—attracting global capital and technology while maintaining central control. Such initiatives offer new opportunities but also reinforce the need for careful navigation of regulatory and political boundaries.
US Sanctions and Economic Pressure
Ongoing US sanctions continue to severely restrict Iran's access to international financial systems and trade networks, complicating foreign investment and supply chain operations. These sanctions target key sectors such as oil exports and banking, increasing transaction costs and risks for international businesses engaging with Iran.
US-Taiwan Defense Cooperation Expansion
The US approved an $11.1 billion arms package for Taiwan, including advanced HIMARS systems and drones, strengthening Taiwan’s deterrence capabilities. This deepening defense partnership increases strategic stability but also intensifies Chinese countermeasures and sanctions, affecting business operations.
Corporate Governance and ESG Reforms
Taiwan’s stock exchange launched the Power UpTW initiative, with nearly half of listed companies participating in governance and ESG improvements. Enhanced transparency and disclosure standards aim to boost investor confidence and international competitiveness.
Technological Innovation and Digital Economy Growth
Rapid advancements in technology and digital infrastructure expansion position Canada as a competitive hub for innovation-driven industries, attracting foreign direct investment and fostering new trade opportunities in digital services.
Defense Industry Expansion and Localization
Turkey’s defense industry localization rate has surpassed 80%, with exports exceeding $7.1 billion in 2024. Ongoing investments in advanced military technology and joint production projects bolster its strategic autonomy, impacting foreign investment and international partnerships.
Foreign Investment Climate Deteriorates
Sanctions, currency instability, and political unrest have sharply reduced foreign direct investment. The environment is marked by opaque regulations, high corruption, and unpredictable policy shifts, deterring new entrants and expansion.
US Protectionism and Export Barriers
US tariffs on Canadian goods, including furniture, cabinets, and biofuel feedstocks, challenge Canadian manufacturers and exporters. Delays or increases in tariffs disrupt business planning, employment, and force companies to seek alternative markets and strategies.
Accelerating Food Self-Sufficiency Policies
Indonesia has achieved rice self-sufficiency and halted rice and sugar imports for 2026, with surplus production and plans to export. This shift strengthens food security, impacts global commodity prices, and signals major changes for agribusiness supply chains.
Agricultural Protests Disrupt Logistics
Widespread farmer mobilizations, including blockades in Paris and Lyon, have disrupted transport and supply chains. These protests, focused on trade policy and regulatory burdens, pose risks to business continuity and market access for international firms operating in France.
Regulatory and Policy Uncertainty
South Africa's evolving regulatory environment, including changes in mining charters and Black Economic Empowerment (BEE) policies, creates uncertainty for investors. Ambiguities in policy enforcement and potential nationalization debates affect long-term investment strategies and risk assessments.
Widespread Unrest and Political Instability
Nationwide protests over economic hardship, corruption, and governance have resulted in at least 15 deaths and hundreds of arrests. The unrest signals rising political risk, threatening business continuity and investor confidence.
Weak Business Activity and Sluggish Growth
South Africa’s private sector ended 2025 with the weakest business activity among major African economies, as the PMI fell to 47.7. Weaker domestic and international demand, along with high unemployment, constrain growth prospects and limit opportunities for expansion and supply chain resilience.
Trade Agreements Expansion
Vietnam is actively expanding its network of free trade agreements (FTAs), including the CPTPP and EVFTA. These agreements enhance market access, reduce tariffs, and attract foreign direct investment, positioning Vietnam as a strategic hub for manufacturing and export-oriented businesses.
US Sanctions and Escalating Tariffs
The US has intensified sanctions, imposing a 25% tariff on countries trading with Iran, directly impacting global supply chains and trade flows. These measures raise costs, deter investment, and complicate international partnerships, especially for India, China, and the UAE.
Critical Minerals Access and Infrastructure Gaps
Greenland’s mineral wealth offers major supply chain opportunities, but extraction is hindered by lack of infrastructure and skilled labor. International investors face high entry barriers, regulatory uncertainty, and potential political disruption, impacting resource strategies and industrial planning.
Sectoral Overdependence on Semiconductors
Despite headline export growth, non-semiconductor exports declined 1% in 2025. Korea’s heavy reliance on chips masks underlying vulnerabilities in other sectors, underscoring the need for diversification and innovation in manufacturing and services.
Financial Sector Developments and Regulatory Changes
Reforms in France's financial sector, including banking regulations and fintech growth, impact capital availability and investment climates. These changes affect multinational corporations' financing options and influence cross-border financial transactions and risk assessments.
Digital Transformation Acceleration
Germany's push towards Industry 4.0 and digital infrastructure upgrades accelerates innovation but demands significant capital investment. Companies must adapt to digital workflows and cybersecurity requirements to maintain competitiveness in global markets.
Organizational Transformation and Innovation
Korean companies are accelerating organizational transformation to stay competitive globally, especially in tech and manufacturing. Consulting demand is high for change management, digitalization, and governance reforms, impacting cross-border M&A and operational strategies.
Cautious Federal Reserve Policy Outlook
The Federal Reserve, after cutting rates by 75 basis points in 2025, is expected to pause further easing in early 2026 due to persistent inflation and labor market weakness. This cautious stance affects global capital flows, borrowing costs, and currency markets, influencing international investment strategies.
Aggressive US Tariffs And Sanctions Expansion
The US is implementing sweeping tariffs, including proposed 500% rates on countries importing Russian oil, and expanding secondary sanctions. These measures reshape global trade flows, pressure strategic partners, and create uncertainty for supply chains and cross-border investments.
Full Foreign Access to Capital Markets
Saudi Arabia will fully open its stock market to all foreign investors starting February 2026, abolishing the Qualified Foreign Investor regime. This historic liberalization is expected to unlock $9–10 billion in inflows, deepen liquidity, and enhance Saudi's weight in global indices, fundamentally transforming the investment landscape.
Regional Security Alliances and Strategic Positioning
Japan’s explicit linkage of its security to Taiwan and US strategic documents underscore Taiwan’s role in Indo-Pacific stability. Heightened military posturing and alliance-building increase both deterrence and the risk of escalation, affecting long-term business planning and risk assessment.
Infrastructure and Supply Chain Modernization
Record export volumes highlight Brazil’s need for continued investment in logistics, ports, and supply chain resilience. Upgrades are crucial to sustain growth, reduce bottlenecks, and meet rising international standards, especially as trade volumes approach US$700 billion in 2026.
Agricultural Export Disruptions
Ukraine, a major global grain exporter, faces challenges in agricultural production and export logistics due to conflict and infrastructure damage. These disruptions impact global food supply chains, commodity prices, and trade partnerships, affecting international markets and investment in agribusiness.
Infrastructure Investment and Development
Significant government initiatives focus on upgrading transport, digital, and energy infrastructure to boost economic resilience. These investments aim to enhance supply chain connectivity and attract foreign direct investment, though project delays and funding uncertainties pose risks.
Political Uncertainty Ahead of Elections
Political volatility, including Parliament dissolution and upcoming elections, creates uncertainty for business operations and investment planning. Coalition dynamics and reform agendas may alter regulatory environments, affecting strategic decisions for international investors.
Fiscal Discipline and Tax Reform Challenges
Thailand’s Medium-Term Fiscal Framework targets deficit reduction and public debt control, with phased VAT increases and tax reforms. Political will is crucial; delays or reversals risk credit downgrades, higher funding costs, and reduced fiscal space for crisis response.
Regulatory Environment and Corporate Governance
Japan’s evolving regulatory framework, including stricter corporate governance and ESG standards, impacts compliance costs and investor confidence. Enhanced transparency and sustainability requirements influence corporate strategies and attract responsible investment, shaping Japan’s business landscape.
US Sanctions and Economic Pressure
Ongoing US sanctions continue to severely restrict Iran's access to international financial systems, limiting foreign investment and complicating trade. These sanctions target key sectors like oil, banking, and shipping, increasing operational risks for international businesses and disrupting supply chains reliant on Iranian exports and imports.
Geopolitical Competition With China
Escalating US-China tensions over technology, trade, and critical minerals disrupt global supply chains. China’s green industrial push and export controls on key materials challenge US dominance, forcing firms to reassess sourcing, market access, and risk exposure in Asia-Pacific.
Oil Market Influence
Saudi Arabia's role as a leading oil producer significantly impacts global energy markets. Its production decisions influence oil prices, affecting international trade costs and energy-dependent industries worldwide. Investors closely monitor Saudi policies to anticipate market shifts and adjust strategies accordingly.
Geopolitical Tensions and Trade Policies
Rising geopolitical tensions, particularly with Russia and China, influence Germany's trade policies and export controls. Sanctions and regulatory changes impact key industries such as automotive and machinery, necessitating strategic realignments in sourcing and market focus to navigate evolving international trade landscapes.