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Mission Grey Daily Brief - January 31, 2025

Summary of the Global Situation for Businesses and Investors

The global situation is currently marked by President Trump's controversial policies, which have impacted various countries and regions. In Myanmar, the UN Chief has urged a return to civilian rule as the country faces a worsening crisis, with millions in need of humanitarian aid and rising food insecurity. Afghanistan is also facing challenges due to President Trump's suspension of foreign aid, leading to anxiety over food supplies and disruptions for charities. Greece's popular tourist island of Santorini is experiencing increased volcanic activity, which could impact tourism and local communities. Additionally, Denmark and the EU are rallying against Trump's ambitions for Greenland, emphasising territorial integrity and sovereignty.

Trump's Tariff Showdown with Colombia

President Trump's tariff showdown with Colombia has sent ripples through Latin America, signalling turbulent times ahead. The dispute, sparked by Colombian President Gustavo Petro's refusal to accept deportees, led to Trump imposing a 25% tariff on Colombian exports, with threats of escalation. This standoff sends a clear message to Latin America that resistance to U.S. immigration policies will be met with swift economic consequences. Left-leaning governments, especially those misaligned with Washington's priorities, should expect heightened scrutiny and pressure. Smaller economies reliant on U.S. trade may face significant risks, as Trump's willingness to weaponize immigration and tariffs could disrupt regional economic balance and erode trust in U.S.-Latin American relations.

China and Russia may benefit from this situation, as some countries may strengthen ties with these U.S. competitors to counterbalance U.S. influence. Colombia's concession avoided a trade war, but other Latin American countries may be tempted to defy Trump, potentially compromising their sovereignty and economic stability.

Trump's Impact on Canada and the U.S.-Canada Relationship

President Trump's policies are also driving a wedge between Canada and the United States, with discussions about Canada potentially joining the EU. Canada is seeking ways to mitigate the impact of U.S. tariffs, with Trump's nominee for commerce secretary suggesting swift border action. This strained relationship could have significant implications for trade and security cooperation between the two countries.

Humanitarian Crisis in Myanmar

The UN Chief has called for a return to civilian rule in Myanmar as the country faces a worsening humanitarian and human rights crisis, with nearly 20 million people expected to need aid. Hunger has reached alarming levels, with 15 million people projected to face acute food insecurity due to soaring inflation and supply chain disruptions. Conflict and displacement have further exacerbated the situation, with millions fleeing across borders and communities on the brink of collapse.

The UN has expressed concerns over the military's plan to hold elections, warning that intensifying conflict and human rights violations do not permit free and peaceful polls. The UN has called for stronger sanctions, restrictions on the junta's access to weapons, and support for international justice mechanisms to address the root causes of the crisis.

Trump's Ambitions for Greenland and EU Response

President Trump's ambitions for Greenland have ignited tensions between the U.S. and European nations, particularly Denmark, over the strategically important territory. Trump's threats of military action have prompted a united response from Denmark and the EU, highlighting the geopolitical significance of Greenland. Danish Prime Minister Mette Frederiksen has reiterated Denmark's firm stance, stating that "Greenland is Greenland and the Greenlandic people are people."

The EU has expressed solidarity with Denmark, signalling potential collective military readiness and a lack of tolerance for unilateral U.S. actions. Denmark has announced plans to increase its military capabilities and strengthen its position within the North Atlantic, bolstering surveillance and sovereignty over the Arctic region. This crisis also underscores the EU's commitment to safeguarding its member states and territorial integrity.

Recommendations for Businesses and Investors

Given the evolving global situation, businesses and investors should closely monitor developments and assess the potential impact on their operations in the affected regions. For those with interests in Latin America, closely monitoring the evolving relationship between the U.S. and Colombia and its potential impact on trade and investment is crucial. Engaging in scenario planning and developing contingency strategies can help businesses mitigate risks and adapt to changing circumstances.

In the context of Trump's policies, businesses should consider the potential implications for their supply chains, market access, and overall business environment. Diversifying markets and supply chains may be prudent to reduce exposure to potential disruptions.

As the situation in Myanmar continues to deteriorate, businesses with operations or supply chains in the region should prioritise the safety of their employees and consider contingency plans to ensure business continuity.<co: 0,1,3,4,5,6,7,9,10,11,13,14>ensure business continuity.</


Further Reading:

'Uncertainty never ends' as deal to free Cuba prisoners unravels under Trump - Citizentribune

Canada can dodge tariffs with swift border action, says Trump’s nominee for commerce secretary - Toronto Star

Donald Trump is driving a wedge between Canada and the United States. Could we join the EU? - Toronto Star

Increased volcanic activity detected in Greece's popular tourist island of Santorini - Northeast Mississippi Daily Journal

Myanmar: UN chief urges return to civilian rule as crisis worsens - UN News

New FM Laura Sarabia must reset Colombia’s image with Washington - The City Paper Bogotá

President Trump's order to suspend foreign aid hitting Afghanistan particularly hard - KVNF Public Radio

Secretary of State says Trump's plans for Greenland 'not a joke' - The Center Square

Trump orders migrant detentions at Guantanamo as Cuba attacks 'act of brutality' - live updates - BBC.com

Trump tariffs will cause price of food, gas and other items to jump quickly in Canada, experts say - Toronto Star

Trump's Greenland Ambitions Stir Unprecedented EU Defenses - Evrim Ağacı

Trump’s Nine-Hour Economic War on Colombia Rattles Markets - Yahoo Finance

Trump’s Tariff Showdown with Colombia Signals Turbulent Times Ahead for Latin America - Global Americans

Trump’s tariffs loom and even his supporters in Texas are nervous - The Texas Tribune

Themes around the World:

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Defense Industry Privatization and Growth

Israel’s defense sector is undergoing privatization, with major IPOs planned for Israel Aerospace Industries and Rafael. Rising global demand for Israeli defense technology, especially in Europe, is boosting exports and cross-border partnerships, reshaping investment strategies.

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Resilient Power and Infrastructure Investment

India’s power sector is set for Rs 4.5 lakh crore ($54 billion) investment by 2032, focusing on grid upgrades, renewable integration, and energy storage. Infrastructure development supports long-term demand, supply-chain reliability, and the green transition.

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US-Indonesia Trade Deal Transformation

A forthcoming US-Indonesia trade agreement is set to quadruple bilateral trade from $40 billion, lowering tariffs and expanding market access. The deal will reshape supply chains, boost exports, and incentivize foreign direct investment, especially in manufacturing and digital sectors.

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Legal Uncertainty Over US Tariff Authority

Pending US Supreme Court rulings on the legality of emergency tariff measures create uncertainty for global trade partners. Businesses face challenges in long-term planning, as tariff structures and trade agreements could shift rapidly depending on legal outcomes.

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Green Transition and Cybersecurity Risks

Rapid expansion of decentralized, internet-connected renewable energy infrastructure introduces significant cybersecurity vulnerabilities. Securing the grid now requires a unified public-private security framework to mitigate risks of data manipulation and widespread outages.

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Export and Import Dynamics Shift

Germany’s modular building exports are rising, supported by demand for sustainable and high-quality solutions in Europe and beyond. Import trends reflect increased sourcing of advanced materials and components, impacting trade balances and supply chain strategies for global firms.

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Critical Minerals and Resource Security

The US government’s $2.5 billion push for domestic critical mineral production is reshaping investment in mining and advanced manufacturing. New contracts and legislation aim to reduce import dependency, enhance national security, and support resilient supply chains.

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Volatile Inflation and Interest Rate Outlook

Despite moderating inflation, robust employment and wage growth have increased expectations of Reserve Bank rate hikes in 2026. This environment creates uncertainty for borrowing costs, investment planning, and consumer spending, requiring businesses to closely monitor monetary policy developments.

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Canada’s Strategic Autonomy and Defense Spending

Canada is doubling defense spending by 2030 and building domestic resilience in critical sectors. This policy aims to strengthen sovereignty and reduce vulnerability to external coercion, impacting procurement, industrial partnerships, and the defense supply chain landscape.

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Expansion of Battery Recycling Infrastructure

Significant investments are underway in France to expand battery recycling and reconditioning facilities. Projects like Weeecycling and new reconditioning centers will boost capacity, create jobs, and support circular economy goals, directly impacting supply chains and operational costs.

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Economic Statecraft and Export Controls

China has refined its use of sanctions and export controls, especially on rare earths and critical minerals, to defend strategic interests and respond to Western pressure. These measures heighten supply chain vulnerability and compliance risks for foreign firms.

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Semiconductor Sector Faces Geopolitical Pressure

South Korea’s semiconductor industry is under pressure from evolving US tariff policies and investment demands, as well as competition with Taiwan for favorable US trade terms. These dynamics threaten Korea’s global market share and could force further US-based investment by Korean firms.

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Energy Transition and Industrial Competitiveness

Germany is accelerating its energy transition by phasing out coal, building new gas plants, and subsidizing industrial power prices. While aiming for climate goals, the high cost of the transition and energy security concerns are prompting significant government intervention to support energy-intensive industries.

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Labor Market and Workforce Realignment

Global tech and financial firms are shifting jobs to India amid US layoffs and AI adoption. Over 50% of surveyed companies plan to expand hiring in India in 2026, reflecting India’s growing role as a global talent hub and the impact of labor market reforms and skilling initiatives.

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Labor Market Reforms and Corporate Impact

South Korea is enacting sweeping labor reforms to extend protections to up to 8.6 million freelancers and platform workers. While aiming to reduce inequality, these measures could increase compliance costs, heighten labor market rigidity, and accelerate automation in business operations.

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Geopolitical Tensions and Supply Chain Realignment

Geopolitical competition, especially with China, is prompting US firms to restructure supply chains, diversify sourcing, and invest in regional trade agreements. These shifts are reshaping global trade flows and increasing operational complexity for international businesses.

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Domestic Growth Relies on Exports

China’s 5% GDP growth in 2025 was mainly export-driven, with weak domestic consumption and investment. Authorities aim to boost domestic demand and technological self-reliance, but future growth remains vulnerable to external trade pressures and global demand shifts.

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Capital Controls Tighten Amid Fiscal Strain

New regulations require declarations for cash exports over $100,000 and restrict gold bar movements. These controls aim to curb capital flight, increase transparency, and stabilize the ruble, but may deter foreign investment and complicate international financial operations in Russia.

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Tech Sector Investment Amid Uncertainty

Despite geopolitical turmoil, Israel’s government and private sector continue to invest heavily in technology, with initiatives like the Yozma Fund and major projects such as Nvidia’s new campus. These investments sustain Israel’s global tech leadership but are vulnerable to regional instability and global capital flow shifts.

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Sweeping US Sanctions and Oil Restrictions

The US has intensified sanctions on Iran, targeting oil exports and shipping, with new measures including a 25% tariff on countries trading with Iran. These actions have severely restricted Iran's access to global markets, undermined its fiscal stability, and forced key partners like India to reconsider strategic investments such as the Chabahar port.

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Vision 2030 Economic Transformation

Saudi Arabia’s Vision 2030 drives diversification beyond oil, fostering rapid growth in non-oil sectors, digital innovation, and foreign investment. This transformation reshapes market opportunities, regulatory frameworks, and competitive dynamics for international businesses.

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Regional Trade Expansion and Diversification

Turkey is rapidly expanding trade with Gulf countries and the UK, with bilateral trade with Kuwait up 52% and UK trade targeted at $40 billion. These efforts reduce dependency on traditional partners and open new investment and supply chain opportunities.

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Supply Chain Security Amid Geopolitical Tensions

Rising China-Japan tensions and US-China rivalry are driving South Korea to strengthen supply chain resilience. Export controls on dual-use goods and rare earths, particularly by China, pose risks to Korean high-tech manufacturing and regional supply chain stability.

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Humanitarian Crisis and Aid Access Constraints

Israel’s control over Gaza’s borders and restrictions on humanitarian aid have led to severe shortages and a potential famine. The reopening of the Rafah crossing is anticipated but not guaranteed. These dynamics disrupt logistics, increase compliance risks, and heighten reputational concerns for multinationals.

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Supply Chain Resilience Amid Global Disruptions

Global supply chains remain in a state of permanent disruption due to geopolitical tensions, trade realignments, and energy volatility. Finnish businesses are adapting by diversifying sourcing and investing in digital infrastructure, but exposure to external shocks remains a critical risk factor.

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Monetary Policy Shifts and Inflation

Turkey’s central bank has shifted to a cautious easing cycle, lowering the policy rate to 37% as inflation fell to 30.9% in December 2025. While investor confidence is improving, inflation volatility and policy uncertainty remain significant risks for business planning and financing.

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Record Export Growth Driven by Chips

South Korea’s exports surged 34% year-on-year in January to $65.85 billion, led by booming semiconductor demand for AI servers and memory chips. This export momentum, especially to China and the US, underpins economic resilience but faces risks from protectionist policies and supply chain disruptions.

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Oil Exports Under Sanctions Pressure

Despite sanctions, Iran exports up to 1.7 million barrels of oil daily, mainly to China at steep discounts. New US measures and domestic unrest threaten further disruptions, with potential to sharply impact global energy markets and pricing.

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Rare Earths Sector Expansion and Innovation

Australia’s rare earths industry is witnessing rapid growth, with new projects, ASX listings, and resource discoveries. Advances in processing and integrated extraction are positioning Australia as a key global supplier, attracting investment and reshaping supply chains for high-tech and clean energy.

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Green Energy and Ammonia Investments Accelerate

South Korea is investing heavily in green ammonia and renewable energy, aiming to retrofit 24 coal plants for ammonia co-firing and expand clean energy exports. These initiatives support decarbonization goals and position Korea as a leader in Asia’s green transition.

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Nearshoring Momentum and Supply Chain Shifts

Mexico’s role as a nearshoring hub is accelerating, driven by US-China tensions and global supply chain recalibration. Firms are relocating manufacturing to Mexico for resilience, but face challenges including labor shortages, infrastructure gaps, and regulatory complexity.

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US Trade Policy Realignment Accelerates

Recent US trade policy shifts, including new tariffs and renegotiated agreements, are reshaping global commerce. These changes drive uncertainty in cross-border operations, impacting supply chain strategies and international investment decisions for multinational firms.

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Defense Buildup and Regional Alliances

Japan is doubling defense spending and deepening alliances with the US, Australia, and others to counter China. Expanded military capabilities and joint industrial policies are reshaping the Indo-Pacific security architecture, with direct implications for foreign investment and supply chains.

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Energy Transition and LNG Import Surge

Egypt is rapidly expanding renewable energy projects, signing $1.8 billion in deals with Norway and China. However, domestic gas production decline and regional supply disruptions have turned Egypt into a major LNG importer, raising costs and supply chain complexity.

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Geopolitical Tensions and Regional Security Risks

Border disputes with India, instability in Afghanistan, and trilateral dynamics involving China heighten security risks for supply chains and cross-border trade. Persistent threats from militancy and unresolved regional conflicts add to operational uncertainties for international businesses.

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Infrastructure Control and Sovereignty Disputes

The Australian government’s push to reclaim the Chinese-leased Port of Darwin underscores growing concerns over foreign control of strategic assets. The dispute has direct implications for logistics, trade flows, and foreign investor confidence in Australia’s infrastructure sector.