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

US Trade Pressure Rising

Washington has widened complaints over South Korean trade barriers, targeting rice, soybeans, AI procurement, steel, digital regulation and map-data rules. The USTR expanded Korea’s barrier section from seven to 10 pages, raising risks of tougher negotiations, tariffs and compliance burdens.

Flag

Tariff Volatility and Legal Uncertainty

US trade policy remains highly unstable after the Supreme Court struck down 2025’s broad tariffs, yet new duties continue under alternative authorities. Frequent rate changes, pending refunds near $166 billion, and shifting exemptions complicate pricing, contracts, sourcing, and market-entry decisions.

Flag

Buy Canadian Procurement Frictions

Canada’s new procurement rules prioritizing domestic content in contracts above C$25 million are becoming a bilateral flashpoint. The U.S. has flagged the policy as a trade barrier, raising risks for foreign bidders, public-sector suppliers, and firms reliant on integrated North American procurement markets.

Flag

Investment Push in Green Tech

Bangkok is pairing cost relief with structural reform, including plans to open electricity markets, launch a carbon credit exchange, expand green finance, and target AI and semiconductor investment. These measures could improve long-term competitiveness and create new partnership opportunities.

Flag

Trade Flows Shift to Third Countries

US import demand is being rerouted from China toward Mexico, Vietnam, Taiwan, India, and other suppliers rather than disappearing. Taiwan alone generated a $21.1 billion February goods deficit with the US, underscoring new concentration risks in semiconductors, electronics, and transshipment-sensitive supply chains.

Flag

Vision 2030 project reassessment

Major Vision 2030 programs are being reviewed as war-related losses reportedly exceeded $10 billion. Flagship developments such as Neom and Sindalah have been scaled back or paused, potentially slowing construction demand, foreign participation, and long-term diversification opportunities.

Flag

Tax reform transition burdens business

Implementation of Brazil’s dual-VAT reform begins in 2026 and runs through 2033, forcing companies to operate old and new systems simultaneously. Estimates suggest adaptation costs could reach R$3 trillion, affecting ERP upgrades, compliance planning, supplier contracts, pricing structures and logistics models.

Flag

Demographic Decline Deepens Shortages

Taiwan’s labor outlook is worsening as fertility fell to 0.695 last year, with February births at a record-low 6,523 and population declining for 26 straight months. Businesses should expect tighter labor supply, older workforces, and rising wage and productivity pressures.

Flag

Rising Defense Industrial Mobilization

Japan is expanding long-range missile deployment and lifting defense spending above 9 trillion yen, while the United States deepens industrial cooperation. This supports defense manufacturing and dual-use technology demand, but also elevates regional geopolitical tension and contingency risk.

Flag

Monetary Policy and Inflation Uncertainty

The Bank of England held rates at 3.75%, but inflation is projected to reach 3.5% in Q3 2026 as businesses expect 3.7% price increases over the next year. This creates uncertainty for financing costs, consumer demand, capital expenditure and foreign investment timing.

Flag

Industrial Stagnation and Weak Growth

Germany’s economy remains structurally weak, with leading institutes cutting 2026 GDP growth to 0.6% from 1.3%. Industrial output has fallen sharply since 2018, constraining demand, delaying capital spending, and increasing pressure on exporters, suppliers, and foreign investors.

Flag

Power Market Liberalisation Delayed

Despite reform momentum, South Africa delayed its wholesale electricity market launch to the third quarter of 2026. The setback prolongs uncertainty for independent producers, traders and large users, slowing procurement planning, competitive pricing benefits, and energy-intensive investment commitments.

Flag

Port and Rail Infrastructure Bottlenecks

A breakdown of Vancouver’s 57-year-old Second Narrows rail bridge exposed critical export vulnerabilities. The Port of Vancouver handled 170.4 million tonnes last year and about C$1 billion in goods daily, so disruptions can quickly hit energy, grain, potash and broader Indo-Pacific supply reliability.

Flag

AI Chip Export Surge

South Korea’s March exports rose 48.3% year on year to a record $86.13 billion, with semiconductor exports up 151.4% to $32.83 billion. This strengthens electronics-linked investment appeal, but increases dependence on volatile global AI demand cycles and concentrated memory supply chains.

Flag

Energy Import Shock Exposure

Japan remains acutely vulnerable to Middle East disruption, sourcing roughly 90-95% of crude oil imports from the region. Reserve releases, fuel subsidies and supply stress are raising costs for transport, chemicals, manufacturing and trade-dependent sectors across the economy.

Flag

State Intervention Raises Expropriation Risk

The Kremlin is intensifying demands on domestic business through ‘voluntary contributions,’ shifting tax burdens, and growing control over strategic sectors. For foreign investors, this reinforces already severe risks around asset security, profit repatriation, arbitrary regulation, and politically driven state intervention.

Flag

Rising Business Cost Burden

Companies are confronting higher wage, transport, energy and compliance costs alongside softer demand. Services PMI fell to 50.3 and export sales declined, signalling margin pressure across sectors and forcing firms to reassess hiring, pricing, footprint decisions and near-term expansion plans.

Flag

China Decoupling Trade Pressures

Mexico’s new 5% to 50% tariffs on 1,463 non-FTA product lines, widely aimed at Chinese inputs, are reshaping sourcing decisions. Beijing says measures affect over $30 billion in exports and may retaliate, raising costs for manufacturers reliant on Asian components.

Flag

Foreign Investment Reform Momentum

Investor access is improving through the 2025 investment law, including full foreign ownership, stronger protections, and easier capital flows. Net FDI inflows rose 90 percent year-on-year to SR48.4 billion in Q4 2025, reinforcing Saudi Arabia’s appeal for long-term international capital deployment.

Flag

Sanctions Evasion Oil Dependence

Despite sanctions and conflict, Iran is exporting an estimated 2.4-2.8 million barrels per day, with China absorbing over 90%. This entrenches opaque shipping, ship-to-ship transfers, and dark-fleet activity, increasing compliance, due-diligence, and reputational risks for traders, refiners, insurers, and financiers.

Flag

Reshoring Push Meets Constraints

The administration is expanding financing and incentives for domestic manufacturing, including SBA loans with 90% guarantees, yet evidence of broad reshoring remains limited. Manufacturing payrolls fell by roughly 98,000 over the year, highlighting execution risks from labor shortages, cost gaps, and policy uncertainty.

Flag

Red Sea Logistics Hub Expansion

Saudi Arabia is rapidly strengthening its Red Sea and overland logistics role, adding shipping services, truck corridors, rail links, and storage zones. This improves trade resilience, supports Gulf redistribution, and increases the Kingdom’s importance for regional supply-chain routing decisions.

Flag

Rial Collapse Domestic Instability

Iran’s domestic economy remains severely stressed by inflation above 42%, a sharply weaker rial, and food inflation reportedly above 100%. These pressures erode consumer demand, worsen import costs, heighten labor and protest risks, and undermine predictability for market-entry or operating decisions.

Flag

Critical Infrastructure Bottlenecks Persist

Rising LNG exports, AI-driven power demand and geopolitical energy shocks are intensifying pressure for US pipeline and permitting reform. Infrastructure constraints limit the country’s ability to scale output quickly, affecting industrial power costs, export capacity, project timelines and location decisions for investors.

Flag

Export Competitiveness Versus Costs

Turkey still offers scale, market access and manufacturing depth, but businesses face rising loan rates near 50%, labor and input cost pressures, and softer external demand. These conditions support selective export opportunities while compressing margins and increasing working-capital requirements across supply chains.

Flag

Gaza Ceasefire Uncertainty

Negotiations over Hamas disarmament and Gaza reconstruction remain unresolved, despite ceasefire talks and mediator involvement. Delays keep donor funding, rebuilding activity and broader regional stabilization on hold, prolonging geopolitical risk premia and limiting confidence in medium-term normalization for trade and investment.

Flag

Volatile U.S. Tariff Regime

Frequent changes to U.S. tariff measures, court rulings, and replacement authorities have made trade costs highly unpredictable. Baseline duties near 10% and shifting product-specific tariffs are distorting pricing, contract terms, market access decisions, and long-term cross-border investment planning.

Flag

Carbon Border Levy Frictions

France is pressing Brussels to pause the EU carbon border levy on imported fertilisers, but the Commission has resisted. The dispute highlights rising compliance costs for carbon-intensive sectors and uncertainty for agrifood, chemicals, steel, and import-dependent supply chains.

Flag

Security risks hit supply chains

Costa Rica’s role as a key cocaine transshipment point heightens container contamination, customs-control and corruption risks around ports and logistics corridors. For exporters and multinationals, tighter screening, compliance costs and reputational exposure are becoming material operational considerations.

Flag

Climate Exposure Hits Agriculture

Climate resilience has become a formal reform priority under the IMF’s RSF, reflecting Pakistan’s recurring flood, water and disaster vulnerabilities. For businesses, extreme weather threatens crop yields, textile raw materials, transport networks and insurance costs, especially across agriculture-linked export supply chains.

Flag

Critical Minerals Geopolitics Intensifies

Ukraine’s minerals are gaining strategic weight in reconstruction and foreign investment, but occupation risks are rising. Russia is exploiting deposits in seized territories, while Kyiv is channeling investor interest into minerals, gas, and oil projects, increasing competition, political risk, and due-diligence complexity.

Flag

Energy Import Shock and Rationing

Egypt’s monthly energy bill rose from $1.2 billion in January to $2.5 billion in March, prompting fuel price increases, early shop closures and partial remote work. Businesses face higher operating costs, possible rationing, and elevated risks to industrial continuity.

Flag

Rising Input Costs for Smelters

Nickel producers face higher ore benchmark prices, tighter mining quotas, and surging coal and sulfur costs, while some projects report operational disruptions. These pressures threaten smelter profitability, increase risks of layoffs and supplier stress, and ripple through stainless steel and battery chains.

Flag

Fiscal Tightening and Election Risk

Brasília plans stricter fiscal triggers after a 2025 primary deficit of 0.4% of GDP, including limits on tax incentives and payroll growth. This supports macro credibility, but election-year politics and rigid indexed spending still raise financing and policy-uncertainty risks.

Flag

Regional War and Security Risk

Israel’s confrontation with Iran and continued Gaza volatility remain the dominant business risk, disrupting demand, labor supply and planning. The Bank of Israel cut 2026 growth to 3.8% from 5.2%, while reserve call-ups, missile threats and uncertainty raise operating costs.

Flag

Emergency Liquidity and Gold Measures

Authorities are using exceptional tools to stabilize markets, including $10 billion in FX swap auctions, gold-for-FX swaps and large reserve mobilization. Gold reserves were around $135 billion, but extensive use signals elevated stress in Turkey’s external financing position.