Return to Homepage
Image

Mission Grey Daily Brief - February 10, 2025

Summary of the Global Situation for Businesses and Investors

The global situation is marked by geopolitical tensions and economic uncertainty. President Donald Trump has implemented a series of policies that have significant implications for international relations and global trade. The war in Ukraine continues to escalate, with North Korea supporting Russia and a Russian oligarch warning of a potential world war. Trump's policies have also impacted allies such as Canada, Mexico, and Australia, as well as rivals like China. Trump's tariffs and trade policies have disrupted supply chains and increased costs for consumers and businesses. Trump's actions have also strained relations with allies and rivals, creating a volatile and unpredictable environment for businesses and investors.

Trump's Tariffs and Trade Policies

President Donald Trump has implemented a series of tariffs and trade policies that have significant implications for international relations and global trade. Trump's tariffs have disrupted supply chains and increased costs for consumers and businesses. Trump's tariffs on China have impacted the pharmaceutical industry, as China supplies the U.S. with approximately 30% of its active pharmaceutical ingredients. Trump's tariffs could lead to shortages or increased costs of generic drugs, putting patients at risk. Trump's tariffs have also impacted Ireland, which is highly exposed to U.S. trade policies due to historic links and an industrial policy that has relied on tax measures attractive to U.S. multinational corporations. Ireland collects much of the corporate tax revenue that a more coherent U.S. tax code would channel back across the Atlantic. Trump's tariffs have also impacted Canada, which is highly integrated with the U.S. auto industry and relies on Canada's heavier crude oils. Trump's tariffs have disrupted supply chains and increased costs for Canadian businesses and consumers. Trump's tariffs have also impacted Mexico, which is highly integrated with the U.S. auto industry and relies on Mexican labor for manufacturing. Trump's tariffs have disrupted supply chains and increased costs for Mexican businesses and consumers. Trump's tariffs have also impacted Australia, which is highly integrated with the U.S. steel and aluminum industry. Trump's tariffs have disrupted supply chains and increased costs for Australian businesses and consumers.

The War in Ukraine and North Korea's Involvement

The war in Ukraine continues to escalate, with North Korea supporting Russia and a Russian oligarch warning of a potential world war. North Korea has sent thousands of soldiers to fight alongside Russian troops, resulting in heavy losses for both sides. A Russian oligarch, Andrey Melnichenko, has warned that a world war could follow if <co:


Further Reading:

China makes some of Americans’ most common medicines. They won’t be spared from Trump’s tariffs - The Independent

Chinese construction risks turning the Yellow Sea into a flashpoint - Business Insider

Elite North Korean troops return to the fight after devastating battlefield losses - New York Post

Patrick Honohan: Ireland is more exposed to Trump’s tariff war than any other European country - The Irish Times

Putin Ally Warns Trump Escalation in Ukraine 'Will Lead to a World War' - Newsweek

They helped the US fight the Taliban. Now Trump has left these Afghans stranded - The Independent

Trump is intensifying his trade war. Australia may not be immune - Sydney Morning Herald

Trump will formally announce steel and aluminum duties Monday, including on Canada - Toronto Star

Ukraine-Russia war live: North Korean army supports ‘just cause’ of Putin’s war, Kim Jong Un says - The Independent

‘This is the next four years’: Canadian officials react to Donald Trump’s steel and aluminum tariff threats - Toronto Star

‘Turn this around’: Alarm grows in Australia after Trump announces 25 per cent tariffs - Sydney Morning Herald

‘We can’t count on the U.S. anymore’: Canada can pull away from America and thrive, economists say - Toronto Star

Themes around the World:

Flag

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.

Flag

AI Infrastructure Investment Surge

France announced €93 billion of foreign investment projects at Choose France, including SoftBank’s €45 billion data-center plan through 2031. Strong nuclear-backed power availability is boosting France’s attractiveness for AI, cloud, advanced manufacturing and high-value digital infrastructure.

Flag

EU Accession Reform Conditionality

EU membership talks are advancing after Hungary lifted its veto, but funding and integration remain tied to rule-of-law, anti-corruption, judiciary, and minority-rights reforms. This improves long-term regulatory convergence while keeping near-term policy execution and compliance risks elevated.

Flag

Cambodia Border Dispute Disruptions

Thailand’s standoff with Cambodia has shut border gates and suspended wider bilateral talks, disrupting more than 100 billion baht in annual border trade, labor mobility, and logistics flows, while delaying access to offshore energy resources in a disputed 26,000 sq km area.

Flag

JETP Funding Implementation Gap

Indonesia’s Just Energy Transition Partnership totals $21.4 billion, yet only about $3.1 billion had reportedly been formally approved for disbursement by May 2026. The slow conversion of commitments into projects delays renewable deployment, grid upgrades, and industrial decarbonization opportunities for foreign investors.

Flag

BOJ Tightening and Yen Risk

The Bank of Japan is signaling possible near-term rate hikes as inflation risks broaden, while the yen remains near 160 per dollar. Higher funding costs, volatile exchange rates, and rising bond yields could reshape hedging, borrowing, pricing, and inbound investment strategies.

Flag

US Tariff Exposure Rising

Washington has proposed 10% tariffs on UK imports under a forced-labor probe, with hearings starting 7 July. The measure would disrupt transatlantic trade planning, raise compliance burdens, and pressure exporters in autos, industrial goods, aerospace-linked and consumer supply chains.

Flag

Fiscal resilience with tighter priorities

Despite buffers from low debt, reserves, and the sovereign wealth fund, the kingdom’s budget deficit widened to $33.5 billion in May, up 20% year on year. That supports resilience, but implies stricter capital allocation and project screening.

Flag

Investment Hit by Legal Uncertainty

The OECD says uncertainty around judicial reform, regulatory changes and the USMCA review is depressing investment more than exports. It cut Mexico’s 2026 growth forecast to 0.8%, highlighting weaker investor confidence in rulemaking, dispute resolution and long-term project bankability.

Flag

US Tariff Bargaining Exposure

Seoul’s trade outlook remains heavily shaped by Washington’s tariff diplomacy. South Korea pledged US$350 billion of US investment for lower tariff rates, yet implementation disputes and renewed US complaints create uncertainty for exporters, capital allocation, and bilateral market access planning.

Flag

PIF Domestic Investment Reorientation

The Public Investment Fund is shifting roughly 80% of its portfolio toward domestic projects while reducing international exposure from 30% to 20%. This strengthens local deal flow, infrastructure demand, and industrial opportunities, but may narrow outbound capital channels for foreign partners.

Flag

Fiscal Credibility and Reform Risk

Investor confidence has weakened amid populist spending plans, negative rating outlooks, and concerns over policymaking credibility. Foreign bond ownership has fallen to 12.6% from nearly 40% pre-pandemic, raising borrowing costs and potentially delaying infrastructure, industrial projects, and longer-term investment commitments.

Flag

Managed US-China Trade Friction

Beijing and Washington are institutionalising a managed-trade approach rather than resolving structural disputes. A new bilateral trade board may ease tariffs on roughly $30 billion of non-strategic goods, but higher baseline US tariffs, export controls and policy unpredictability will keep sourcing, pricing and market-access risks elevated.

Flag

Infrastructure Connectivity Push Continues

The government is prioritizing ports, shipbuilding, rail integration, climate-resilient projects and logistics modernization to cut high domestic freight costs, with new maritime cooperation and strategic infrastructure initiatives potentially improving distribution efficiency, project opportunities and regional supply-chain reliability.

Flag

Defense Buildup and Industrial Policy

Tokyo is revising core security documents and may accelerate defense spending to 2% of GDP by fiscal 2025, with debate extending higher. Expanded defense procurement, drone investment, and export liberalization will create opportunities in aerospace, electronics, cybersecurity, and dual-use manufacturing.

Flag

Defense buildup reshapes investment

Germany is accelerating rearmament, with far larger military budgets, major procurement programs and expanding aerospace, drone and space spending. This supports defense manufacturing, advanced engineering and dual-use technology opportunities, while redirecting public capital, labor and industrial capacity toward security-related sectors.

Flag

Trade-linked agricultural market opening

India’s proposed concessions in talks with the United States include reducing tariffs on industrial goods and agricultural imports such as tree nuts, fruits, soybean oil, wine, and spirits, creating opportunities for foreign suppliers while increasing competitive pressure on local producers.

Flag

Russia Sanctions and Secondary Tariff Risk

Congress and the administration are developing tougher Russia measures, including possible 500% tariffs tied to Russian imports or countries purchasing Russian commodities. Even if not fully enacted, the proposal heightens sanctions risk for energy traders, shippers, insurers, and globally exposed compliance teams.

Flag

US Tariff and Labor Pressure

Taiwan faces proposed additional US Section 301 tariffs linked to forced-labor import controls, with a suggested 10% rate pending final decision. The issue pushes tighter supply-chain due diligence, labor compliance and sourcing reviews for exporters serving the US market.

Flag

Energy Reform Lowers Power Risk

Electricity supply has improved materially as Eskom’s monopoly weakens and private generation expands through rooftop solar and independent power producers. Lower blackout risk supports manufacturing continuity, cold chains and investor confidence, though fuel vulnerability and uneven municipal distribution still threaten operating costs.

Flag

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.

Flag

Forced-Labor Rules Globalize Compliance

The proposed U.S. tariffs tied to foreign forced-labor enforcement would extend trade pressure well beyond direct import bans, affecting suppliers across Asia, Europe, and the Americas. Multinationals need deeper traceability, third-country sourcing reviews, and stronger human-rights due diligence to preserve U.S. market access.

Flag

China Exposure Under Scrutiny

US authorities are intensifying scrutiny of Chinese involvement in subsidized manufacturing projects, including facilities claiming 45X tax credits. For investors and manufacturers, this signals tougher compliance checks, pressure to localize know-how, and higher strategic risk for ventures with Chinese personnel, technology, or supply links.

Flag

South China Sea Security Risks

Maritime tensions in the South China Sea remain a material business risk as Chinese, Philippine and European naval activity intensifies. The waterway carries more than $3 trillion in annual shipborne commerce, so any escalation could disrupt shipping insurance, routing, energy flows and regional supply-chain resilience.

Flag

High Rates Constrain Capital

Brazil’s Selic rate remains at 14.5%, among the world’s highest real rates, while inflation expectations for 2026 rose to 5.04%. Elevated borrowing costs and weaker monetary transmission raise financing costs, slow private investment and increase hedging and working-capital pressures for business operations.

Flag

Energy Security and Hormuz Exposure

Middle East conflict has amplified South Korea’s vulnerability as a major energy importer, with roughly 57% of oil sourced from the region. Seoul is diversifying through larger Canadian oil and LNG purchases, but higher fuel, freight, and insurance costs still threaten supply chains.

Flag

China Reliance Deepens Further

Russia’s dependence on China for payments, technology substitution, manufacturing and export demand is deepening as Western channels remain constrained. This supports continuity in bilateral trade, but increases strategic concentration risk and leaves foreign businesses exposed to Chinese secondary-sanctions and political sensitivities.

Flag

Labor Enforcement Risks Increase

USMCA labor enforcement remains an operational risk, illustrated by the U.S. rapid-response case involving Newmont’s Peñasquito mine in Zacatecas. Import suspensions, accelerated investigations, and reputational exposure mean manufacturers, miners, and exporters must strengthen labor compliance and supplier oversight.

Flag

Tensions sociales dans les transports

La grève nationale SNCF du 10 juin a perturbé TGV, TER, RER et fret passagers, avec environ un TGV sur trois supprimé. Les revendications salariales et contre la filialisation signalent un risque persistant de perturbations logistiques et de mobilité des salariés.

Flag

Tighter Russia sanctions enforcement

British support for operations targeting Russia’s shadow fleet signals tougher sanctions enforcement in maritime trade and energy logistics. Firms involved in shipping, insurance, commodities and compliance face higher due-diligence requirements, route adjustments and legal risks linked to sanctions evasion exposure.

Flag

Defense Export Boom and Backlash

Israel’s defense exports reached a record $19.2 billion in 2025, up nearly 30% year on year, with Europe taking 36% and Asia-Pacific 32%. The surge supports industrial activity, but sanctions, exhibition bans, and political scrutiny create reputational and market-access risks for counterparties.

Flag

Trade deal implementation uncertainty

Implementation of the UK-India free trade agreement may slip to autumn 2026 as steel safeguard disputes complicate ratification. For exporters, investors and manufacturers, delayed tariff relief and market access certainty could postpone sourcing shifts, pricing decisions and cross-border expansion plans.

Flag

Supply Chain Onshoring Pressures

Taiwanese firms face growing pressure to internationalize production, especially into the United States. Officials said companies could invest up to US$250 billion there, backed by government credit support, while US permitting and labor constraints may slow execution and raise project costs.

Flag

US Trade Probe Escalation

Washington has opened a third Section 301 investigation into Vietnam, this time on intellectual property, alongside probes into overcapacity and forced labor. With tariffs previously cut from 46% to 10%, renewed U.S. pressure raises material uncertainty for exporters and investors.

Flag

Coalition Politics and Reform Continuity

Ramaphosa’s reform agenda remains active, but impeachment pressure, coalition instability, and uncertainty over new local coalition rules create policy execution risk. Investors should watch whether economic reforms in logistics, visas, and governance outlast current political leadership and municipal volatility.

Flag

Rare Earth Export Leverage

China’s licensing controls on seven heavy rare earths remain active, with exports of yttrium, dysprosium and terbium reportedly about 50% below pre-restriction levels. This keeps automotive, electronics, aerospace and defense supply chains exposed to delays, shortages and higher procurement costs.