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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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Regional war drives logistics shocks

Israel’s confrontation with Iran and spillovers from Gaza elevate force‑majeure risk for regional trade. Middle East airspace closures and Red Sea insecurity raise transit times, premiums and inventory buffers, disrupting time-sensitive supply chains and cross‑border service delivery.

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Forestry downturn and lumber dispute

Forestry remains under severe pressure from high US softwood duties, cited around 45% in some cases, alongside domestic harvest constraints. Expect mill rationalization, higher input volatility for construction products, and increased dispute-settlement risk as the US pushes to weaken binational panels.

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Competition enforcement in platforms

Israel’s Competition Authority is challenging dominant platform models, signaling tougher antitrust. Wolt may lose its exemption for operating both a delivery platform and its own grocery retail chain, potentially forcing divestment—reshaping last-mile logistics, pricing, and retail partnerships.

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Fiscal strain and reform risk

France’s 2026 budget passed amid political fragility, with deficits around 5% of GDP and debt near 117%+. Rising borrowing sensitivity increases tax and spending-change risk, affecting investment planning, public procurement pipelines, and consumer demand outlook.

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Risco fiscal e dívida crescente

A dívida bruta pode encerrar o mandato em ~83,6% do PIB e projeções apontam >88% em 2029, pressionando o arcabouço fiscal e a credibilidade. Isso eleva prêmio de risco, encarece financiamento, e aumenta volatilidade cambial e regulatória para investidores.

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Digital Regulation and Data Sovereignty

The Coupang subpoena and the 33.67m-record data leak investigation highlight rising cross-border tension over privacy, enforcement actions, and perceived discrimination against U.S. firms. Expect tighter cybersecurity, evidence-preservation, and platform obligations, with potential trade spillovers and litigation risk.

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Labor localization tightening (Saudization)

New Nitaqat and profession-specific quotas raise Saudi hiring requirements, including 60% Saudization in key sales/marketing roles from April 2026, plus tighter job-title restrictions. Multinationals face higher payroll costs, talent shortages in niche skills, and operational risk if noncompliant.

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Power security and fast load

Electricity demand is targeted to grow 15%+ in 2026, forcing accelerated generation and transmission build-out. EVN plans hundreds of grid projects and pursues cross-border imports, targeting ~8,000 MW from Laos by 2030. Energy constraints can disrupt factories, data centers, and pricing.

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İsrail ticaret kısıtları genişliyor

Ankara’nın İsrail’e yönelik ticaret tedbirlerini Eur-Med tercih belgelerini durdurmaya kadar genişlettiği bildirildi. Bu, gümrükte menşe ve tercihli tarife süreçlerini etkileyebilir. Bölgesel tedarik, ara malı akışı ve kontrat performansı için belirsizlik artar.

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Labor regulation and strike liability

The “Yellow Envelope” law taking effect March 10 broadens “employer” to include subcontractors and limits damages claims against strikers. Foreign chambers warn reduced predictability and higher labor-dispute exposure, especially for manufacturers and logistics operators using layered contracting models.

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China–Japan trade retaliation risk

China imposed dual‑use export curbs on 40 Japanese entities, amid broader frictions over Taiwan and reported rare-earth and magnet restrictions. Firms face licensing delays, compliance burdens, and potential component shortages, accelerating de-risking and supplier diversification.

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Critical minerals and lithium policy

Mexico’s lithium nationalization has not yet translated into production; key deposits are clay-based and costly to extract, with state firm LitioMX pursuing technology partnerships. Uncertainty around permitting and commercial terms complicates EV-battery supply chain plans and upstream investment.

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Fernwärme-Regeln bremsen Bestandsumstieg

Streit um Wärmelieferverordnung und Kostenneutralitätsgebot kann Fernwärmeprojekte im Bestand verzögern, während Wärmepumpen weniger regulatorische Hürden haben. Für internationale Netzbetreiber, OEMs und Infrastruktur-Fonds verschieben sich Risiko-Rendite-Profile, Timing und Deal-Strukturen in Transformationsprojekten.

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Water infrastructure reliability and governance

Recurring outages in Gauteng highlight aging assets, high non‑revenue water (often >40% in some municipalities), and fragmented accountability. National reforms and major projects like LHWP‑2 aim to improve supply, but near-term disruptions threaten industrial operations and urban services.

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Yen volatility and BOJ tightening

Markets expect BOJ policy rates to reach 1% by end‑June, with intervention risk rising near USD/JPY 160. Volatility affects pricing, hedging, and importer margins; tighter policy may lift funding costs while stabilizing inflation expectations.

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US–China tech controls tighten

Washington is hardening licensing and end‑use conditions for advanced AI chips (e.g., Nvidia H200), while China accelerates substitution. Expect volatile availability, compliance burden, grey‑market leakage, and shifting revenue exposure across cloud, AI, electronics and automation supply chains.

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Ports, freight corridors, logistics capex

Budget 2026 lifts capex to ~₹12.2 lakh crore (4.4% of GDP), funding seven rail corridors, freight corridors, and logistics upgrades. Lower transit time and logistics costs can improve export competitiveness, but timelines, land acquisition, and contractor capacity remain key.

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Shadow fleet interdictions rising

Western navies are shifting from monitoring to physical interdiction: boardings, detentions and possible seizures of ‘stateless’ or falsely flagged tankers are increasing. Russia is reflagging vessels; ~640 ships are sanctioned. Shipping, port, and insurance risk premiums are rising materially.

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State-backed semiconductor reshoring push

Japan is scaling strategic chip capacity via Rapidus: government took a 40% stake (11.5% voting rights) and plans further investment, targeting 2‑nm mass production in 2027. Subsidies reshape supplier ecosystems, site selection, and partnership opportunities for inbound investors.

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Cybersecurity regulation tightening

Israel is advancing its first permanent cyber law, expanding National Cyber Directorate powers and requiring immediate incident reporting for “critical” entities (potentially 400–600 firms). Multinationals face higher compliance, disclosure, and vendor-management obligations across Israeli operations.

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Cross-border corridor and border security

Thailand and Myanmar are exploring a Tachilek–Mae Sai transit corridor to move Thai fruit to China via Myanmar and expand bilateral flows. However, periodic border tensions and security policies can disrupt checkpoints, insurance costs, and delivery reliability for border supply chains.

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Regulatory tightening on tax compliance

Implementation of a unified tax registration number and expanded invoicing/record-keeping requirements increase compliance burdens, especially for multinationals with related-party transactions. Expect more audits, documentation demands (master/local files), and potential penalties impacting operating costs.

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Port and inland logistics bottlenecks

Operational disruptions at key gateways and inland corridors—compounded by tighter documentation and customs processes—can trigger dwell time, demurrage and missed shipping windows. Exporters and importers should build buffer inventory, contract multiple forwarders, and pre-clear documentation to protect service levels.

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Vision 2030 strategy recalibration

PIF’s 2026–2030 strategy reset shifts Vision 2030 from capital-intensive mega-projects toward industry, minerals, AI, logistics and tourism, while re-scoping NEOM and others. For investors, this changes project pipelines, counterparties, procurement priorities and timeline risk across sectors.

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Selic alta e volatilidade

Com Selic em 15% e inflação de 12 meses em 4,44% (perto do teto de 4,5%), o BC sinaliza cortes graduais a partir de março, sem guidance longo. A combinação de juros e incerteza fiscal afeta crédito, câmbio, hedges e decisões de capex.

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Dezenflasyon ve faiz oynaklığı

Yıllık enflasyon Ocak’ta %30,7; TCMB 2026 için %15–21 aralığı öngörüyor ve politika faizi %37 seviyesinde. Kur-faiz belirsizliği ithalat maliyetleri, fiyatlama, krediye erişim ve sözleşme endekslemeleri üzerinden yatırım kararlarını ve işletme sermayesini doğrudan etkiliyor.

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Alta dependencia de China para exportaciones

La concentración de ventas de crudo en China (más de 80% de compras seaborne; estimaciones ~1.38 mb/d) crea vulnerabilidad a cambios regulatorios, controles aduaneros y presión diplomática. Para proveedores y traders, sube el riesgo de contrapartes opacas y descuentos forzados.

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Digital economy regulation and AI

Australia’s copyright, data and AI policy settings are in flux as global AI firms expand locally and lobby for clearer licensing models. Outcomes will affect cloud/data-centre investment, IP compliance costs, and cross-border data governance for multinationals operating in Australia.

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India–US tariff reset framework

An interim India–US trade framework cuts many US duties on Indian goods to about 18% (from punitive levels), with contingent zero‑tariff carveouts later. In return, India may lower tariffs/NTBs for selected US goods, reshaping export pricing and compliance.

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Fiscal Rules and Investment Execution

Debate over Germany’s debt brake and stimulus delivery creates uncertainty for contractors and investors. A €500bn off-budget infrastructure fund and sharply higher defense budgets may boost demand, but political resistance and execution shortfalls can delay projects, permitting, and procurement pipelines.

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Power tariffs and circular debt

Energy-sector reform remains central to IMF conditionality. Tariff redesign and circular-debt containment can shift cost burdens between households and industry, affecting margins, plant uptime and pricing. Investors face policy risk around subsidies, DISCO recoveries, and contract enforcement in generation and distribution.

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Pemex: deuda, liquidez y socios

Pemex bajó deuda a US$84.500m (‑13,4%) pero Moody’s prevé pérdidas operativas promedio ~US$7.000m en 2026‑27 y dependencia fiscal. Emitió MXN$31.500m localmente para vencimientos 2026 y amplía contratos mixtos con privados; riesgo para proveedores y energía industrial.

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US–China trade recalibration persists

Tariffs, technology barriers and geopolitical bargaining are shifting bilateral flows from simple surplus trade toward a more complex pattern. China–US goods trade fell 18.2% in 2025 to 4.01 trillion yuan ($578bn). Firms respond via localization, alternative sourcing, and hedged market access planning.

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Tourism and visa liberalization

Expanded 60-day visa exemptions for 93 countries, new Destination Thailand Visa options, and broader e-visa/digital arrival processes aim to boost arrivals and service-sector revenues. Benefits include demand for hospitality and retail, but authorities are tightening misuse controls that may affect hiring and operations.

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Sanctions escalation and secondary pressure

The U.S. continues expanding and enforcing sanctions—especially targeting Russia- and Iran-linked networks and “shadow fleets”—raising secondary-sanctions exposure for non‑U.S. firms. Banks, shippers, insurers, and traders face higher due‑diligence burdens, payment disruptions, and contract frustration risk.

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Persistent Section 232 sector tariffs

National-security tariffs under Section 232 remain on steel, aluminum, autos, copper, lumber and select furniture products, independent of the IEEPA ruling. These targeted levies reshape sourcing and nearshoring decisions, complicate automotive/metal supply chains, and sustain retaliation risk from partners.