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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:

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FDI Reforms and High-Value Sector Focus

Thailand is shifting its investment strategy to attract FDI in high-tech, green infrastructure, and wellness tourism. Legal and regulatory reforms, infrastructure upgrades, and anti-corruption initiatives aim to reposition Thailand as a regional hub for future industries, but execution remains critical.

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Nusantara Capital City Attracts Investment

The Rp6 trillion state budget allocation and entry of new investors signal growing confidence in Nusantara (IKN) as Indonesia’s future economic hub. Development of commercial, office, and sports facilities is set to accelerate, impacting construction, real estate, and services.

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Resilient but Diversifying Trade Structure

Despite higher US tariffs and global headwinds, China’s exports grew 6.1% in 2025, with diversification toward ASEAN, Latin America, and Africa. High-tech products now drive export growth, but external demand uncertainty and protectionism remain significant risks for international investors.

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China’s Beef Tariffs Hit Exports

China imposed a 55% tariff on Brazilian beef exceeding a 1.1 million ton quota, threatening up to US$3 billion in export revenue for 2026. This measure disrupts supply chains and forces Brazilian producers to seek new markets and renegotiate trade terms.

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Nuclear Program Developments

Iran's nuclear activities remain a focal point of geopolitical tension, influencing global diplomatic relations and economic sanctions. Progress or setbacks in nuclear negotiations directly affect investor confidence and the potential lifting or tightening of trade restrictions, impacting international business engagement with Iran.

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Moderate Economic Growth, High Inflation

Brazil’s economy is projected to grow around 1.7% in 2026, with inflation remaining high at 12-12.75%. Fiscal stimulus and strong agriculture support growth, but high interest rates and external risks require cautious planning for investment and supply chain strategies.

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Monetary Policy and Inflation Management

Turkey has reduced inflation from over 42% to just above 30% in 2025, with further declines targeted for 2026. Tight monetary policy and structural reforms have stabilized the economy, but high inflation and currency volatility remain key risks for investors and supply chain planners.

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Monetary Policy Shifts and Dollar Volatility

The Federal Reserve’s cautious approach to rate cuts, persistent inflation concerns, and political pressure are driving market uncertainty. Dollar weakness and financial repression are impacting global investment strategies, cross-border financing, and commodity pricing, with ripple effects across emerging markets.

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International Relations And Geopolitical Tensions

South Africa’s condemnation of US military actions in Venezuela underscores its commitment to multilateralism and sovereignty. Rising global tensions and trade disputes, including US tariffs, may affect diplomatic ties, trade flows, and the risk environment for multinational firms operating locally.

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Aerospace Sector’s Trade Surplus and Tax Risks

The French aerospace industry, generating €77.7 billion in 2024 and a €30 billion trade surplus, is vital for exports and employment. Industry leaders warn that higher taxation or regulatory burdens could undermine competitiveness, with ripple effects on supply chains and France’s trade position.

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Investment Bottlenecks and EEC Land Issues

Land shortages and outdated zoning regulations in the Eastern Economic Corridor (EEC) delay industrial projects and deter foreign investment. The government is fast-tracking reforms, but infrastructure and regulatory bottlenecks remain significant barriers to scaling up high-value manufacturing and technology clusters.

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Inflation and Monetary Policy

Rising inflation in the US has prompted the Federal Reserve to adopt tighter monetary policies, including interest rate hikes. These measures influence borrowing costs, consumer spending, and capital flows, affecting investment strategies and operational costs for multinational corporations.

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Political Centralization and Reform Acceleration

Vietnam’s leadership is consolidating under General Secretary To Lam, who is likely to combine the roles of party chief and president. This centralization enables rapid policy shifts, deep administrative reforms, and streamlined investment approvals, but raises concerns over checks and balances and long-term institutional resilience.

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Rare Earth Export Controls Threaten Industry

Japan’s near-total reliance on Chinese heavy rare earths for EVs and electronics faces disruption, with potential GDP losses up to 0.43% if restrictions persist. This jeopardizes automotive, electronics, and defense sectors, forcing global firms to seek alternative suppliers.

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Pipeline Urgency and Market Diversification

Canadian officials and industry leaders stress the need for new pipelines to the Pacific and Atlantic coasts to access Asian and European markets. Strategic infrastructure is now critical to offset potential U.S. market losses and maintain competitiveness in a volatile global energy landscape.

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Tech Sector Talent Flight and Uncertainty

Israel’s technology sector faces significant talent loss due to security fears, with 53% of firms reporting increased relocation requests. Multinational closures and layoffs threaten Israel’s innovation ecosystem, which accounts for 20% of GDP and over half of exports.

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US Tariffs and Trade Diversification

Recent US tariffs on Brazilian goods highlighted the risks of concentrated trade relationships. Brazil is intensifying efforts to diversify export markets, including the EU, Southeast Asia, and Canada, to reduce vulnerability and ensure stable growth in international trade.

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Home Battery Subsidy Rush and Market Impact

Australia’s federal subsidy scheme for home batteries has spurred over 200,000 installations, driving rapid market growth. Imminent changes to subsidy rules are prompting a rush for larger systems, impacting energy storage business models and influencing consumer and commercial investment decisions.

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Sanctions, Export Controls, and Compliance Risk

The US is intensifying sanctions enforcement, especially on Iran and entities linked to protest crackdowns. New secondary sanctions and export controls, including on advanced technology, raise legal and operational risks for global businesses, requiring robust compliance systems and constant monitoring of regulatory changes.

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Resilient Trade Surplus and Diversification

Despite US tariffs and weakening exports to the US, China posted a record $1.19 trillion trade surplus in 2025, driven by surging exports to Africa, Southeast Asia, and Latin America. This diversification mitigates Western pressure but raises new tensions over overcapacity and market access.

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Renewable Energy Expansion and Green Finance

Egypt signed $1.8 billion in renewable energy deals, including Africa’s largest solar project and battery storage facilities. Supported by international banks, these initiatives advance Egypt’s 2030 clean energy targets, offering opportunities for green investment and supply chain localization.

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Digital Economy and Innovation Ecosystem

South Korea's advanced digital infrastructure and innovation ecosystem foster growth in ICT, fintech, and e-commerce sectors. Government support for startups and technology adoption enhances competitiveness, attracting international partnerships and investment in high-tech industries.

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US Tariffs and Secondary Sanctions Expansion

The US has imposed a 25% tariff on all countries trading with Iran, escalating secondary sanctions. This policy directly threatens global supply chains, deters investment, and forces international companies to reassess exposure to both Iran and its major trading partners.

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Japanese Yen Volatility and Monetary Policy

The yen’s volatility, driven by cautious Bank of Japan tightening and external shocks, impacts trade competitiveness and investment returns. Currency fluctuations and rising bond yields require international firms to hedge exposures and monitor policy signals closely.

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Expanding Export Markets and Halal Economy

Vietnam is diversifying exports to new markets, notably the Middle East’s Halal sector, amid stricter standards in traditional destinations. Exports to the UAE and Saudi Arabia reached $7.3 billion in 2025. Developing a Halal ecosystem and leveraging FTAs are key to future growth and supply chain resilience.

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Geopolitical Realignment and Investment Climate

Israel’s expanding influence in the Middle East, including new alliances and recognition of Somaliland, is reshaping regional dynamics. However, persistent instability and election-year politics create uncertainty for investors and complicate long-term strategic planning.

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Regulatory and Legal Risks

The evolving regulatory environment in Russia, including increased government intervention and legal uncertainties, poses compliance challenges. Foreign investors face risks related to property rights, contract enforcement, and sudden regulatory changes impacting business operations.

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Geopolitical Stability

Regional tensions and Saudi Arabia's involvement in Middle Eastern conflicts affect investor confidence and trade routes. Stability in the kingdom is crucial for maintaining secure supply chains and fostering a favorable business environment for international investors.

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Investment Stagnation and Infrastructure Cuts

Sanctions and war have led to a 20% cut in Russian rail investment and stagnating GDP, with industrial output declining. Foreign direct investment is constrained, and infrastructure projects face delays, raising long-term risks for investors and operators.

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Labor Market Weakness and Inflation Persistence

US unemployment rose to 4.6%, a four-year high, amid slowing job growth and sticky inflation. Wage growth remains resilient, but labor market uncertainty and inflation risks challenge business cost structures and consumer demand projections.

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Northern Powerhouse Rail Investment

The government has committed up to £45 billion for Northern Powerhouse Rail, aiming to transform connectivity between major cities. This long-term infrastructure project will boost regional growth, create jobs, and unlock new business opportunities, but faces delivery risks.

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Energy Transition and Nuclear Expansion

France’s €52 billion commitment to new nuclear reactors underscores its strategy for energy security and decarbonization. However, hardware shortages, dependence on Asian imports, and rising energy nationalism across Europe create operational and investment uncertainties for energy-intensive industries and infrastructure projects.

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Legal Hardening on Taiwan Status

China’s position papers and sanctions reinforce its claim over Taiwan, challenging international participation and pressuring global firms to comply with its ‘One-China’ principle. This legal hardening increases political risk for companies operating in or trading with Taiwan, the U.S., and allied nations.

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Secondary Sanctions and Tariff Threats

The US is advancing legislation enabling tariffs up to 500% on countries importing Russian energy. India and China, major Russian oil buyers, face mounting pressure, threatening to disrupt global supply chains and trade flows if enacted.

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Environmental Regulations and Sustainability

Stricter environmental policies and sustainability commitments in Brazil impact industries such as mining, agriculture, and energy. Compliance requirements and potential penalties influence operational costs and corporate social responsibility strategies, affecting international partnerships and market access.

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Widespread Civil Unrest And Political Instability

Protests have spread to over 17 provinces, involving merchants, students, and workers, resulting in deaths and business shutdowns. The unrest reflects deep dissatisfaction with governance and creates significant operational and security risks for international businesses.