Mission Grey Daily Brief - January 29, 2025
Summary of the Global Situation for Businesses and Investors
The world is currently facing a multitude of geopolitical and economic challenges. President Trump's aggressive foreign policy and trade war threats have raised tensions with allies and adversaries alike. The Russia-Ukraine war continues to devastate Ukrainian families and North Korea's involvement has led to heavy losses and partial withdrawal of their troops. Congo's conflict with Rwanda-backed rebels has escalated, displacing millions and causing a humanitarian crisis. Diplomatic tensions are rising between the US and Latin American countries over deportation policies and tariff disputes.
US-EU Trade War over Greenland
The US-EU relationship is under strain due to President Trump's threats to seize Greenland. This self-governing Danish territory is strategically important for geopolitical and security reasons, and its abundance of natural resources makes it a critical asset for modern weaponry and dominance in key economic sectors. Trump's aggressive stance has raised the possibility of a trade war between the US and EU, with severe tariffs on Danish exports to the US being threatened. This could significantly impact businesses in both regions, particularly those relying on Danish exports.
Russia-Ukraine War and North Korea's Involvement
The Russia-Ukraine war continues to inflict heavy losses on both sides, with civilians bearing the brunt of the conflict. North Korea's involvement has led to heavy casualties and partial withdrawal of their troops. Kim Jong Un's regime faces growing discontent from younger generations and challenges in maintaining loyalty. The potential for a peace settlement remains uncertain, with President Trump expressing a desire to meet with Vladimir Putin and Zelenskiy emphasizing the need for US leadership in any peace force.
Congo's Conflict with Rwanda-Backed Rebels
Congo's conflict with Rwanda-backed rebels has escalated, with rebels advancing into a key eastern city and causing a major humanitarian crisis. The M23 rebels, one of about 100 armed groups, have captured several towns and advanced into Goma, a regional trade and humanitarian hub. The humanitarian situation is extremely worrying, with hundreds of thousands attempting to flee the violence. Aid groups are struggling to reach displaced people, and the conflict has resulted in one of the world's largest humanitarian crises.
US-Latin America Diplomatic Tensions
Diplomatic tensions are rising between the US and Latin American countries over deportation policies and tariff disputes. Colombia and Mexico have objected to the use of military aircraft for deportations, and Brazil has expressed concern over the treatment of undocumented immigrants. President Trump's aggressive stance has led to retaliatory measures and threats of tariff wars, increasing tensions in the region. Businesses operating in Latin America should monitor the situation closely and prepare for potential disruptions in trade and diplomatic relations.
Further Reading:
A Bulgarian shipping company denies its vessel sabotaged a Baltic Sea cable - The Independent
Colombia quickly found out Trump has no intention of backing down - Sky News
In a split second, Russia wipes out three generations of a Ukrainian family - BBC.com
Kim Jong Un’s grip on power wavers as North Korea’s youth defy loyalty - The New Voice of Ukraine
Russia wipes out three generations of a family in one strike - BBC.com
Trade war could erupt between US and EU over Trump’s threat to seize Greenland - WSWS
Trump ‘Serious as a Heart Attack’ About Launching Trade War With Canada and Mexico - The Daily Beast
Themes around the World:
Divergent Energy Policies Reshape Markets
US policy now prioritizes fossil fuel expansion, including efforts to control Venezuelan oil, while China accelerates its clean energy transition. This divergence increases geopolitical risk, affects global energy prices, and may shift long-term investment toward regions with stable green policy frameworks.
Global Geopolitical Realignment Pressures
Rising U.S. assertiveness, trade fragmentation, and competition from emerging markets are forcing Canada to recalibrate its international economic strategy. Success hinges on rapid infrastructure upgrades, supply chain resilience, and forging new alliances to mitigate geopolitical and economic shocks.
Australia-China Trade Relationship Dynamics
Despite ongoing tensions and new Chinese tariffs on beef, the Australia-China trade relationship remains resilient, with China still Australia's largest export market for minerals, agriculture, and services. However, persistent strategic frictions and unpredictability require businesses to manage risks and diversify export destinations.
US-Israel Strategic Aid Recalibration
Recent US legislative debates and Israel’s stated intent to reduce military aid dependence signal a shift in the bilateral relationship. The $38 billion aid package expiring in 2028 and negotiations for a new 20-year deal impact Israel’s defense sector, technology partnerships, and investor risk assessments.
Critical Minerals and Rare Earths Race
Brazil is emerging as a strategic hub for critical minerals, including lithium and rare earths, amid global supply chain tensions. The EU and Brazil are advancing joint projects, while US-China rivalry intensifies competition for resources, impacting investment flows and industrial policy.
Chinese Imports Challenge Local Industry
A surge in Chinese vehicle imports has widened South Africa’s trade deficit with China, threatening the competitiveness of the domestic automotive sector—a major employer and exporter. This trend may impact local manufacturing, supply chains, and trade sustainability.
Suez Canal Revenue Growth and Supply Chain Role
The Suez Canal Economic Zone reported a 55% revenue increase and attracted $14.2 billion in new investments. Despite past disruptions, canal operations are recovering, reaffirming Egypt’s strategic role in global supply chains and logistics, crucial for trade and multinational operations.
Inflation Moderation and Currency Stability
Annual inflation fell to 10.3% in December 2025 from 23.4% a year earlier, mainly due to lower food prices. However, non-food inflation remains high, and the Egyptian pound is under pressure from debt and import needs, affecting consumer demand and business costs.
Labour Market Reforms and Demographic Pressures
Recent labour laws extend protections to contract workers and address declining birth rates. While these reforms improve workforce stability, demographic shifts and talent shortages may constrain long-term growth and raise labour costs for international investors.
Supply Chain Diversification Gains
Southeast Asia, including Thailand, is capturing sourcing share as global supply chains shift away from China due to tariffs and trade tensions. Thailand’s imports to the U.S. rose 28% in 2025, positioning the country as a key alternative for international supply chain strategies.
Labor Mobility and Skills Partnerships
Germany is expanding labor mobility agreements, especially with India, to address skilled labor shortages. Visa facilitation, joint education initiatives, and skilling partnerships are expected to ease talent flows, benefiting sectors such as healthcare, IT, and advanced manufacturing.
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.
Regional Alliances and Diplomatic Realignment
China’s trade actions test US and South Korean support for Japan, reshaping East Asian alliances. International businesses must factor evolving diplomatic ties and security arrangements into their risk assessments, as regional cooperation and competition directly affect trade and investment flows.
US-China Technology Rivalry
Ongoing U.S. export controls on advanced AI chips and China’s push for domestic alternatives have deepened the tech decoupling. This rivalry forces multinationals to reassess supply chains, R&D investments, and compliance strategies amid shifting rules and heightened IP protection risks.
CUSMA Renegotiation and Trade Bloc Realignment
With Canada’s exports to the U.S. at a 30-year low, the upcoming CUSMA renegotiation is pivotal. Outcomes could range from a complete overhaul to no agreement, pushing Canada to accelerate trade diversification with the EU, Asia, and the Global South, impacting long-term investment strategies and supply chain resilience.
Labour Market and Skilled Migration Initiatives
Germany is addressing labour shortages through new mobility and skills agreements, notably with India. Visa facilitation for Indian professionals and expanded vocational training partnerships are designed to attract talent and support economic growth in key sectors.
Internet Blackouts and Security Crackdown
Amid protests, Iran has imposed nationwide internet shutdowns and deployed military forces, severely disrupting communications, logistics, and business continuity. The crackdown has led to hundreds of deaths and thousands of arrests, raising operational and reputational risks.
Sanctions And Secondary Trade Risks
Sweeping new US sanctions, including up to 500% tariffs on countries buying Russian energy, intensify global trade tensions. These measures affect energy markets, complicate compliance for multinationals, and may trigger retaliatory actions, impacting cross-border investment and supply chain stability.
Foreign Investment Trends and Strategic Shifts
The UK remains a top global destination for FDI, driven by clean energy and AI sectors. However, geopolitical tensions, regulatory reforms, and trade uncertainty are prompting investors to reassess risk, diversify portfolios, and seek stable, rule-based environments for long-term growth.
Persistent Political and Corruption Risks
High-profile anti-corruption raids, including against opposition leader Yulia Tymoshenko, highlight ongoing governance challenges. Political infighting and corruption allegations can delay reforms, undermine EU accession, and complicate the investment climate, despite progress in institutional reforms and external oversight.
Automotive Sector Tariff and Rule Changes
Ongoing negotiations on auto tariffs and rules of origin are central to Mexico’s export competitiveness. Mexico seeks tariff reductions for non-compliant vehicles, while the US pushes for higher regional content. These changes directly impact investment and production strategies in the auto sector.
AI and Advanced Technology Investments
South Korea is tripling AI spending, aiming to become a top-three global AI power. This government-led push is accelerating innovation, attracting foreign direct investment, and reshaping the tech sector, with significant implications for supply chains and talent acquisition.
US-China Trade And Technology Tensions
Trade disputes and export controls between the US and China continue to escalate, with technology restrictions and retaliatory measures impacting semiconductor, automotive, and rare earth sectors. These tensions disrupt supply chains and force global businesses to diversify sourcing strategies.
Anti-Corruption Reforms Under Scrutiny
High-profile corruption investigations, such as those involving Yulia Tymoshenko, highlight both progress and ongoing challenges in Ukraine’s anti-corruption drive. These efforts are crucial for EU accession but create short-term uncertainty for international investors and partners.
Foreign Direct Investment Surge
FDI in Vietnam rose 8.9% to $23.6 billion in 2025, with manufacturing accounting for 82.8%. High-tech, green industries, and logistics attract multinational corporations, reinforcing Vietnam’s role as a strategic hub in global supply chains and boosting long-term investment prospects.
Infrastructure Expansion and PPP Projects
Major infrastructure projects, such as São Paulo’s Line 6 metro, are advancing via public-private partnerships. These initiatives aim to address logistical bottlenecks, but face cost overruns and delays, impacting supply chains and investment timelines for both domestic and foreign businesses.
US-EU Trade Frictions and Regulatory Clashes
The Turnberry Agreement set new tariff and investment terms, but implementation faces delays, digital regulation disputes, and Green Deal conflicts. Uncertainty over quotas, standards, and retaliatory measures complicates transatlantic business operations.
Cross-Strait Relations and Policy Uncertainty
Despite deepening US ties, Taiwan faces ongoing policy uncertainty due to cross-strait tensions. Beijing’s opposition to high-level US-Taiwan engagement and potential for economic coercion remain significant risks for foreign investors and multinational supply chains.
Trade Policy Shifts and Import Controls
France has suspended imports of certain South American products over banned substances, signaling stricter enforcement of EU standards. These measures reflect a broader trend toward protectionism and could impact global supply chains and trade agreements.
Shadow Fleet and Sanctions Evasion
Russia has developed a ‘shadow fleet’ of old tankers and parallel logistics to circumvent Western sanctions, shifting trade toward India, China, and Turkey. This opaque system increases operational risks and regulatory scrutiny for international businesses.
Escalating US-Mexico Security Tensions
Intensified US rhetoric and threats of military intervention against Mexican cartels have raised geopolitical risks, with Mexico firmly rejecting foreign involvement. These tensions could affect investor confidence, border operations, and bilateral cooperation on security and trade.
India-EU Free Trade Agreement Finalization
India is set to finalize a comprehensive FTA with the EU, its largest and most complex trade deal to date. This agreement will reshape trade flows, reduce tariffs, boost exports, attract FDI, and enhance supply-chain resilience, especially amid rising global protectionism.
Shifting Alliances and Defense Pacts
Turkey’s potential entry into a Saudi Arabia-Pakistan mutual defense pact and its balancing act between NATO, Russia, and regional actors reflect a fluid security environment. These shifts may affect foreign investment, technology partnerships, and supply chain security, especially in sensitive sectors.
Robust Export Growth and Trade Surplus
Vietnam posted a record $20 billion trade surplus in 2025, with exports up 17% and processed industrial goods leading. The US remains the top export market, while China dominates imports. Trade growth supports macroeconomic stability but increases exposure to global demand fluctuations and protectionism.
Stagnant Manufacturing Competitiveness
Thailand’s manufacturing sector, especially automotive and electronics, faces declining output and competitiveness. Despite increased FDI, the country struggles to move up the value chain, risking long-term industrial stagnation and reduced attractiveness for high-tech investment.
Innovation, AI, and Digital Transformation
India is accelerating its digital economy through AI, tech innovation, and digital asset regulation. The government is fostering R&D, digital infrastructure, and responsible AI, positioning India as a global leader in digital services and technology-driven growth.