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:
China Trade and Payments Shift
Indonesia expanded local currency settlement with China and Hong Kong, covering bilateral trade that reached US$154.5 billion in 2025, plus cross-border QRIS links. Reduced dollar dependence may ease transaction frictions, but also deepens commercial exposure to China-centered demand and policy dynamics.
Industrial Power and Input Shortages
Damage to industrial sites and disrupted imports are constraining manufacturing supply chains, especially steel, petrochemicals, electronics and food inputs. Factory closures and component scarcity are raising costs for domestic production and limiting reliability for foreign partners sourcing goods or materials.
Agricultural Labor Constraints Deepen
U.S. farms are relying more heavily on the H-2A visa system as broader immigration restrictions tighten labor supply; approvals rose 17% in fiscal 2026's first half. For food, agribusiness, and packaging firms, labor scarcity and compliance issues can elevate cost and supply volatility.
Bank of Japan Policy Normalization
The Bank of Japan raised its policy rate to 1%, the highest since 1995, while warning inflation risks are broadening. Higher borrowing costs, shifting bond yields, and uncertainty over the pace of further tightening will affect financing conditions, asset valuations, and domestic demand assumptions.
Trade Diversification Beyond United States
With nearly 70% of Canadian exports still heading south, Ottawa is accelerating diversification to reduce U.S. dependence. Businesses should expect stronger policy support for alternative export corridors, new partnerships and strategic sectors such as critical minerals, energy and advanced manufacturing.
Political Pressure on Economic Policy
Tensions between the White House, Congress, and regulators are increasing unpredictability around trade and economic policy. Divergent signals on China, tariffs, investment restrictions, and Fed independence complicate scenario planning for foreign investors and multinational operators in the US market.
Red Sea shipping disruption
Houthi threats to ban Israeli-linked shipping in the Red Sea revive major logistics risks on a route that previously handled about $1 trillion of goods annually. Diversions around southern Africa can extend transit times, raise freight rates, and complicate inventory planning.
Sanctions and Russia Exposure
EU and UK sanctions on Russia were extended and tightened, including shadow-fleet, energy, finance, and technology networks. For companies operating around Ukraine, this increases compliance burdens, curbs circumvention channels, and reshapes shipping, banking, counterparties, and cross-border payment risk assessments.
Europe-China Trade Frictions Deepen
EU-China trade tensions are intensifying across EVs, batteries, solar, medical devices and procurement. With the EU’s 2025 goods deficit with China at about €360 billion, Brussels is considering tougher protections, increasing tariff, compliance and retaliation risks for multinationals serving both markets.
Immigration Rules Constrain Labour
Post-Brexit migration tightening has sharply reduced net inflows, with skilled-worker applications falling and sponsor enforcement increasing. While advisers recommend easing salary thresholds in shortage sectors, businesses still face elevated hiring costs, compliance risks and persistent labour shortages across key industries.
Tariff Regime Volatility Deepens
Rapid shifts from emergency tariffs to Section 122 and proposed Section 301 measures have made U.S. import costs and market access less predictable. Firms face higher compliance burdens, pricing uncertainty, and greater difficulty planning sourcing, contracts, and investment timelines.
US Trade Tariff Pressure
Seoul faces growing trade-policy risk from Washington, including proposed additional tariffs of 10 percent or 12.5 percent tied to forced-labor enforcement. This raises compliance, reputational and market-access stakes for Korean exporters, especially if bilateral negotiations fail to secure exemptions or favorable treatment.
Vietnam Competition and Integration
Thailand is deepening economic coordination with Vietnam, targeting bilateral trade of US$25 billion within four years from roughly US$8.6 billion in the first four months of 2026. The partnership supports electronics and semiconductor supply chains, but also intensifies regional competition for FDI.
Shadow Fleet Shipping Risks
Russia’s oil trade increasingly depends on a shadow fleet already exceeding 630 sanctioned vessels, with the UK sanctioning more than 600. New measures now target bunkering, insurers, ports and refineries, increasing freight costs, operational opacity and maritime disruption risks.
Chinese EV Access Controversy
Ottawa’s deal allowing up to 49,000 Chinese EVs annually at a 6.1% tariff has drawn criticism from U.S. officials and domestic automakers. The policy raises concerns over unfair competition, cyber risk and possible new North American restrictions affecting automotive and technology supply chains.
US Trade Frictions Re-Emerge
Australia is pushing back against a proposed 12.5% US tariff tied to forced-labour compliance concerns, arguing it breaches the bilateral free trade agreement. Even if unresolved, the dispute could raise due-diligence costs and uncertainty for exporters integrated into North American supply chains.
Iran Ties Conditional Reset
Riyadh says major economic cooperation with Iran depends on rebuilding trust after recent attacks. This signals continued caution for cross-Gulf commercial planning, while any credible diplomatic de-escalation could materially improve shipping security, investment sentiment and regional operating conditions.
Political Stability and Policy Continuity
The Bhumjaithai-led coalition appears numerically secure, yet procurement controversies and fragile public trust raise policy-continuity risk. For investors, the key issue is not immediate regime change but slower approvals, shifting priorities and higher execution risk for major projects and regulated sectors.
Competitive Tariff Access Race
New Delhi is seeking preferential US tariff treatment over rivals including Vietnam, Bangladesh, Sri Lanka, Pakistan, Malaysia, and Indonesia. Even small duty differentials could redirect orders, factory siting, and supplier selection in textiles, engineering goods, leather, chemicals, and light manufacturing.
Transport and Border Infrastructure Rebuild
Recovery agreements are accelerating spending on roads, rail, water systems, and border crossings, with more than €1.5 billion announced in Gdańsk. This improves logistics redundancy, EU connectivity, and supply-chain resilience, while opening contracts in construction, engineering, freight, and border services.
Domestic inflation and rate uncertainty
The central bank cut the key rate to 14.5% in April and may ease further, yet policymakers still cite inflation and external risks. Volatile borrowing costs, ruble swings and weaker growth complicate pricing, capital budgeting, financing and consumer-market planning inside Russia.
AI-Led Export Surge
Taiwan’s export performance is being powered by AI-related electronics demand, with May exports rising 51.7% year on year to US$78.48 billion. Strong growth supports investment momentum, but also heightens dependence on cyclical tech demand and external policy conditions.
Export-Led Growth Vulnerability
Weak domestic demand, deflationary pressure and a depressed property sector are reinforcing China’s reliance on exports to sustain growth. That increases the likelihood of prolonged trade friction and more aggressive external commercial behavior, while also dampening consumer-market upside for foreign firms seeking stronger onshore demand.
Social Unrest Raises Business Risk
Student protests over fuel prices, living costs, and fiscal priorities are spreading across major cities after fuel hikes exceeding 30% for non-subsidized grades. This raises operational disruption, reputational sensitivity, and labor-risk concerns for consumer-facing, transport-dependent, and urban industrial businesses.
Trade Policy Faces Legal Uncertainty
Court battles over presidential tariff authority have become a major business variable, with rulings alternately blocking and reinstating import duties. This legal instability complicates customs planning, inventory management, and cross-border pricing, especially for companies exposed to broad U.S. tariff actions.
Agronegócio e meio ambiente
O agronegócio segue central para exportações, mas enfrenta maior escrutínio sobre desmatamento ilegal e trabalho forçado. Questões socioambientais já aparecem em disputas comerciais, elevando exigências de rastreabilidade, due diligence e governança para exportadores e investidores estrangeiros.
High-Cost Power Undermines Industry
Electricity costs remain a major competitiveness drag, with business voices citing tariffs around 15-16 cents per unit. Ongoing power-sector reform uncertainty, circular-debt pressures, and possible regulatory fragmentation threaten manufacturers, exporters, and investors evaluating long-term operating costs.
Energy Infrastructure Under Attack
Ukrainian strikes are hitting refineries, pumping stations, storage depots and export terminals, including facilities linked to Novorossiysk and Taman. Russia’s crude output fell to 9.009 million barrels per day in May, increasing disruption risk for fuel availability, exports and logistics planning.
Frozen Assets Reconstruction Finance
Negotiations may unlock parts of Iran’s roughly $100 billion in frozen assets and potentially mobilize up to $300 billion for reconstruction. If implemented, this would create openings in infrastructure, logistics, power, and industrial rebuilding, though execution is constrained by sanctions compliance and political conditions.
Rare Earth Supply Risks Rise
Chinese retaliation targeting U.S. defense-linked and rare-earth-related firms underscores the vulnerability of mineral and magnet supply chains. For manufacturers in electronics, mobility, aerospace, and industrial equipment, diversification will be costly and slow, with licensing delays and shortages remaining a material risk.
Europe Partnership Deepens Rapidly
South Korea is expanding strategic economic ties with Europe through a new EU digital trade agreement, competitiveness partnership, and high-level economic and energy dialogues. Since 2015, EU-Korea goods trade has doubled to about €124.25 billion, improving diversification options.
Energy Prices and Tariff Stress
Higher global oil prices and domestic reform pressure are keeping Pakistan’s energy costs elevated, while debate continues over power-market restructuring, petroleum levies, and subsidy rationalization. Energy-intensive manufacturers face margin pressure, tariff volatility, and greater risk of pass-through costs.
European Diversification and Defense Linkages
Ottawa is deepening trade, defense and industrial ties with Europe as U.S. policy volatility persists. Canada joined the EU’s SAFE framework, expanded classified-information sharing with France, and is considering European procurement, creating openings in aerospace, defense, energy and technology partnerships.
Semiconductor Reshoring and Chip Tariffs
Trump threatens tariffs exceeding 200% on chipmakers refusing to build domestically, targeting 50% US chip share by 2029. With Intel (10% US-owned), TSMC ($165bn), Micron ($200bn) and Apple deals, the reshoring drive reshapes global semiconductor supply chains and capital allocation.
China Plus One Acceleration
Recent disruptions are accelerating diversification toward Australia, India, Southeast Asia and other alternative sourcing bases, especially for minerals, magnets and advanced manufacturing inputs. Companies that move early can reduce concentration risk, but transition costs, qualification delays and infrastructure gaps will keep China central in the near term.
Tariff Regime Volatility Persists
Washington is rebuilding import barriers through Section 301 after courts struck down earlier tariffs, with proposed duties of 10% to 12.5% on roughly 60 countries. The legal uncertainty complicates pricing, sourcing, customs planning, and long-term investment decisions.