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Mission Grey Daily Brief - February 22, 2025

Summary of the Global Situation for Businesses and Investors

The global situation remains tense, with Russia's full-scale invasion of Ukraine entering its third year and hundreds of thousands killed or wounded, tens of thousands missing, and millions of refugees. Ukrainian forces, outnumbered and outgunned, struggle to hold back Russia's slow but steady advances. Trump's harsh words for Zelenskyy have drawn criticism from Democrats and even some Republicans in the U.S. Congress, where defending Ukraine from Russia has had bipartisan support. Trump's embrace of Russia represents a major about-face in U.S. foreign policy, echoing Putin's narrative and signalling a desire to rapidly bring the fighting to a close on terms that Zelenskyy and many in the West say are too favourable to Russia.

Meanwhile, Australia warns airlines over Chinese 'live fire' exercises, Sweden investigates a cable break in the Baltic Sea, and Israel mourns the return of the remains of four murdered hostages, including Shiri Bibas, her son Ariel, and baby Kfir.

Ukraine-Russia War

The Russia-Ukraine war continues to be a significant concern for businesses and investors, with hundreds of thousands killed or wounded, tens of thousands missing, and millions of refugees. Ukrainian forces, outnumbered and outgunned, struggle to hold back Russia's slow but steady advances. Trump's harsh words for Zelenskyy have drawn criticism from Democrats and even some Republicans in the U.S. Congress, where defending Ukraine from Russia has had bipartisan support. Trump's embrace of Russia represents a major about-face in U.S. foreign policy, echoing Putin's narrative and signalling a desire to rapidly bring the fighting to a close on terms that Zelenskyy and many in the West say are too favourable to Russia.

The Ukrainian people are rallying around a defiant President Volodymyr Zelenskyy, who publicly criticized Trump for promoting Russian "disinformation", with public trust in Zelenskyy at 57%. Trump's harsh words for Zelenskyy have drawn criticism from Democrats and even some Republicans in the U.S. Congress, where defending Ukraine from Russia has had bipartisan support. Trump's embrace of Russia represents a major about-face in U.S. foreign policy, echoing Putin's narrative and signalling a desire to rapidly bring the fighting to a close on terms that Zelenskyy and many in the West say are too favourable to Russia.

The Ukrainian people are rallying around a defiant President Volodymyr Zelenskyy, who publicly criticized Trump for promoting Russian "disinformation", with public trust in Zelenskyy at 57%. Trump's harsh words for Zelenskyy have drawn criticism from Democrats and even some Republicans in the U.S. Congress, where defending Ukraine from Russia has had bipartisan support. Trump's embrace of Russia represents a major about-face in U.S. foreign policy, echoing Putin's narrative and signalling a desire to rapidly bring the fighting to a close on terms that Zelenskyy and many in the West say are too favourable to Russia.

China-Australia Tensions

Australia has warned airlines about Chinese 'live fire' exercises, with Foreign Minister Penny Wong confronting her Chinese counterpart over drills off the east coast. This follows EAM Jaishankar's meeting with Chinese Foreign Minister Wang on the sidelines of the G20 meet, where they discussed the Ukraine war and the need for a peaceful resolution. Jaishankar also met with U.S. Secretary of State Antony Blinken, where they discussed the importance of the Indo-Pacific region and the need to counter China's growing influence.

Baltic Sea Cable Break

Swedish authorities are investigating a damaged cable discovered in the Baltic Sea, the latest in a string of recent incidents of ruptured undersea cables that have heightened fears of Russian sabotage and spying in the region. Late last month, authorities discovered damage to the undersea fiber-optic cable running between the Latvian city of Ventspils and Sweden's Gotland. A vessel belonging to a Bulgarian shipping company was seized but later released after Swedish prosecutors ruled out initial suspicions that sabotage caused the damage. The most recent break was found off the island of Gotland, south of Stockholm, in the Swedish economic zone, with the cable running between Germany and Finland. Prime Minister Ulf Kristersson said the government takes all reports of damage to infrastructure in the Baltic Sea very seriously.

Israel-Hamas Conflict

Israel mourns the return of the remains of four murdered hostages, including Shiri Bibas, her son Ariel, and baby Kfir. Hamas handed over the remains under a shaky ceasefire deal, but Israel's military said the body returned was not that of Shiri Bibas. Russia is preparing to declare victory in its war with Ukraine within days, following a public falling out between Trump and Zelenskyy and U.S. pressure to do a deal.


Further Reading:

Australia warns airlines over Chinese ‘live fire’ exercises

BBC forced to apologise as EastEnders star says a racial slur live on air

Elon Musk Wields Chainsaw Gifted To Him By Argentina President "For Bureaucracy"

G20 Meeting | EAM S Jaishankar Meets Chinese FM Wang On The Sidelines Of G20 Meeting | News18

Hamas hands over remains of four Israeli hostages including two children

Holly Willoughby faces new court battle as her media company is ordered to pay eye-watering tax bill

Israel continues to mourn as bodies of murdered hostages returned

Sweden is investigating a cable break in the Baltic Sea

Ukrainians Rally Around Zelensky as Trump and Putin Denigrate Him

Ukrainians rally around their president after Trump seeks to denigrate him

Ukrainians rally around their president after Trump’s harsh comments

Themes around the World:

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Portsmouth base upgrades accelerate

Security and infrastructure works at HMNB Portsmouth are advancing under a wider £3.9 billion investment plan, including surveillance systems, network upgrades, jetties and munitions facilities. The programme should support readiness and contractor demand, while creating execution opportunities in secure infrastructure and maritime services.

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Lebanon front raises escalation risk

Israeli strikes in southern Lebanon and Hezbollah retaliation underscore the fragility of the northern front. Businesses face elevated contingency-planning needs as renewed cross-border escalation could disrupt transport corridors, insurance conditions, workforce mobility, and broader country-risk perceptions.

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Iran sanctions spillover risk

Impending US secondary sanctions on Iran are heightening compliance and counterparty risks across Gulf trade networks. Saudi Arabia is balancing exposure while alternative export routes are discussed, creating uncertainty for companies handling shipping, finance, insurance and energy transactions linked to the region.

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Negotiations favor sectoral exemptions

Recent Lula-Trump talks reopened technical negotiations, but Brazilian officials expect tariffs to remain for now and are prioritizing expanded exemptions instead. That makes sector-specific access decisions increasingly important for exporters, manufacturers, and investors assessing Brazil-US trade exposure and margin risks.

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Further escalation threatens trade channels

Washington is considering tougher steps including aviation sanctions, secondary tariffs and even a land blockade involving neighboring states. Though not yet enacted, these options signal possible disruption to overland trade, air cargo, import flows and third-country business exposure.

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India-SACU trade talks revived

India and SACU have restarted preferential trade agreement negotiations covering goods, customs procedures and rules of origin. South Africa dominates bilateral flows, while India seeks access for autos, pharmaceuticals and machinery and reliable critical-mineral supplies, creating tariff and sourcing implications for exporters.

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Shadow shipping routes expand

Ship-to-ship transfers near Egypt, Malaysia and South Korea are being used to move fuel into Russia while obscuring origins from sanctions enforcement. Businesses exposed to maritime logistics, insurance, vessel screening and compliance face heightened counterparty, tracing and secondary-sanctions risk.

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Rising Regional Security Commercial Risks

Simultaneous pressure from Russia and China, including joint patrols, island tensions and economic coercion, is widening Japan’s geopolitical risk perimeter. Businesses should expect more scrutiny on sensitive technology, shipping resilience, insurance costs and contingency planning for northern and southern maritime routes.

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Gaza ceasefire uncertainty clouds outlook

US-backed Gaza ceasefire efforts remain stalled, with continued Israeli strikes and unresolved terms on Hamas disarmament and withdrawal sequencing. The absence of a diplomatic breakthrough prolongs uncertainty for tourism, consumer demand, project execution, labor availability, and investor risk assessments.

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Water failures raise operating disruptions

Persistent municipal water losses, sewage spills, tanker corruption allegations, and delayed restoration are reinforcing operational fragility across key urban areas. Government reforms and enforcement actions are advancing, but water insecurity is becoming a more visible constraint on industrial continuity, workforce health, and location strategy.

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Longer supply chain transit times

To avoid Red Sea threats, Saudi crude is increasingly moving through Egypt’s SUMED pipeline and Mediterranean outlets. That preserves flows to Europe and the United States, but shipments to Asia may need to sail around Africa, adding about 25 days and increasing inventory and working-capital burdens.

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T-MEC review prolongs uncertainty

Washington has shifted the USMCA/T-MEC into annual reviews rather than a long extension, with negotiations likely stretching into 2027. For firms dependent on North American integration, this raises policy uncertainty, complicates capital allocation, and weakens confidence in long-term Mexico-based manufacturing plans.

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US tariff and transshipment scrutiny

Thailand faces rising trade risk after being flagged in a White House transshipment report tied to China-linked supply chains, while Bangkok seeks to keep US tariff rates below 19%. Exporters warn the designation could undermine confidence in Thai shipments and compliance costs.

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Energy Shock Driving Operating Costs

Middle East disruption, Strait of Hormuz risks, and reduced Russian refinery output have pushed diesel refining margins sharply higher, with U.S. diesel margins reaching record levels. Elevated fuel costs threaten transport, manufacturing, agriculture, mining, and wider supply-chain operating expenses.

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Upstream licensing and reforms

Egypt launched a 2026 global tender for 14 oil and gas areas and is using digital bidding through the Egypt Upstream Gateway. Combined with cleared partner arrears and revised contract terms, this improves entry conditions for international energy investors and service providers.

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Critical Minerals Strategic Leverage

The United States is seeking preferential access to Canadian critical minerals, while Canada links negotiations to broader energy and security discussions. This elevates mining and battery supply chains as strategic assets, with implications for foreign investment, offtake agreements, and North American industrial policy.

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Migrant Labor Shortages Deepen

The exodus of Cambodian workers has exposed labor dependence across agriculture, manufacturing, construction, tourism, and services. Employer groups cited steep declines in Cambodian worker numbers, creating risks to fruit harvesting, rice-export logistics, factory output, and operating-cost inflation.

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Reciprocity law raises countermeasure risk

Brazil has formally opened proceedings under its 2025 Economic Reciprocity Law, creating legal scope for proportional retaliation on imports, investments and intellectual property. Even if delayed, the process increases policy uncertainty for cross-border contracts, sourcing decisions and US-linked operations.

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Manufacturing diversification boosts inflows

Vietnam remains a major China-plus-one destination as multinationals expand electronics, components, and industrial production. Reported figures show realized FDI of about $13 billion in first-half 2026, up 11%, supporting export capacity, supplier localization, and industrial-park demand.

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Alliance Security Affecting Business

U.S. moves to scale back joint military exercises, alongside debate over troop levels and wartime control, are feeding strategic uncertainty. For companies, shifting alliance dynamics could influence political risk, logistics planning, insurance costs, and confidence in Korea’s broader operating environment.

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Russian oil flows face disruption

Ukraine-linked refinery damage and prospective US measures are shifting Russia toward exporting more lower-priced crude instead of refined products. More than 30% of refining capacity was reportedly shut, increasing volatility in product availability, export mix, margins and shipping patterns.

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Nickel-sector operational stress emerges

Mass layoffs at PT Gunbuster Nickel Industry in Morowali Utara, after reduced smelter and power-plant operations, signal operational and labor stress within a key processing hub. The development raises workforce, social-stability and continuity risks for suppliers, contractors and downstream metals investors.

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Export governance centralization push

The president linked commodity exchange reform to a broader single-channel export policy and tighter oversight intended to curb under-invoicing and transfer pricing. Exporters and trading houses may face stricter reporting, compliance demands, and altered transaction structures.

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Hormuz closure cripples shipping

The Strait of Hormuz remains effectively closed, with daily vessel traffic falling from about 130 ships to barely a dozen. Missile strikes, routing disputes and delayed reopening are severely disrupting energy flows, maritime schedules, freight costs and regional supply-chain reliability.

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Electronics supply chain expansion

Thailand’s electronics position is strengthening as PCB output is projected to reach US$6.09 billion in 2026, up 20.4% year on year, supported by BOI incentives, new Taiwanese and Chinese capacity, and linked data-centre and cloud investments.

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Tax and customs reforms

The government is addressing business complaints on VAT refunds, customs clearance, classification, and inconsistent legal interpretation. Authorities said tax, fee, and land-rent relief reached VND173.6 trillion in seven months, while tax compliance costs fell about 51% versus 2024.

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Sovereign Credit Upgrade Momentum

Moody’s upgraded Pakistan to B3 from Caa1, citing improved governance, stronger reserves near $17 billion and lower interest burdens at 35% of revenue. The shift supports refinancing, lowers perceived country risk and may improve access for foreign investors and trade finance.

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Hormuz shipping disruption risk

Recent reports say threats, restrictions and attacks tied to Iran have disrupted commercial traffic in the Strait of Hormuz, with some coverage describing near-standstill conditions. For businesses, this increases freight costs, insurance premiums, routing uncertainty and exposure across global energy and maritime supply chains.

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China transshipment scrutiny escalates

A White House report placed India in Tier 1 transshipment risk, alleging Chinese goods may be minimally processed or relabeled before export to the US. This raises compliance burdens, inspection risks, and possible penalties for manufacturers using Chinese inputs in Indian supply chains.

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Energy and input costs rise

Producer prices rose 3.0% year on year in July, the strongest increase in over three years, while consumer inflation reached 2.8%. Energy costs rose 3.8%, mineral oil products 31.4%, and intermediate goods 5.4%, increasing procurement costs, pricing pressure, and working-capital needs across sectors.

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China Supply Chain De-risking

Recent reporting highlights persistent U.S. dependence on Chinese batteries, rare earths, electronics, and investment across defense-adjacent industries. Even domestically based manufacturers face hidden exposure, increasing the importance of supply-chain mapping, trusted sourcing, and contingency planning for geopolitical shocks.

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Settlement Policy Raises Sanctions

Israel’s advance of the E1 settlement project has triggered warnings of legal and reputational consequences from European governments, while the UK is considering measures to ban trade with Israeli settlements. Businesses face mounting sanctions, market-access, and ESG-related exposure tied to West Bank activity.

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Defense Exports Support Manufacturing

French defense exports remain strong, with €21.24 billion in 2025 orders and India alone accounting for €6.9 billion via 26 Rafale-M jets. Aerospace represented about 40% of orders, supporting production continuity, technology transfer and higher-value industrial activity.

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Korean Investment in US Expands

Korean investment stock in the United States surpassed $90 billion in 2024, with major projects in semiconductors, batteries, critical minerals, steel, and shipbuilding. This deepens supply-chain integration but also increases exposure to US political, immigration, and policy risks.

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Infrastructure resilience becomes operational priority

Taiwan’s recent exercises included mobile-network slowdown tests, convoy protection, mine-clearing and broader continuity planning. The implication for businesses is clear: communications resilience, backup power, cyber readiness and crisis operations are becoming core requirements for operating on the island.

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Inflation and currency instability

Iran’s domestic operating environment is deteriorating under intense inflation, a weakening rial and shrinking output. Reported inflation reached 66% in July, with food prices up 128% year-on-year, undermining consumer demand, raising input costs and complicating pricing, payroll and procurement decisions.