Return to Homepage
Image

Mission Grey Daily Brief - June 16, 2024

Summary of the Global Situation for Businesses and Investors

The world is witnessing a complex interplay of geopolitical and geoeconomic dynamics, with several developments impacting the global landscape. From the ongoing war in Ukraine to the growing tensions between China and the US, the international arena is fraught with challenges and opportunities. Here is a summary of the key issues:

Ukraine Peace Summit

Ukrainian President Volodymyr Zelensky hosted a peace summit in Switzerland, gathering representatives from 101 countries and international organizations. The absence of Russia and China dampened prospects for a significant breakthrough. The summit focused on three themes: nuclear safety, the exchange of prisoners of war, and global food security. Despite Russia's absence, the summit concluded with a joint statement to be presented to Russian representatives at the next summit.

China-US Tensions

The US-China arms build-up continues, with both countries engaging in military drills and countermeasures. China has urged its neighbors to distance themselves from the US, accusing Washington of hegemonic ambitions. Meanwhile, the US has emphasized the importance of maintaining communication channels. The conflicting positions of the two countries on security in the Asia-Pacific region, as well as their involvement in the wars in Gaza and Ukraine, persist.

Kuwait Fire Tragedy

A devastating fire in a multi-story building in Kuwait City, known as the Al-Mangaf "labor camp," resulted in the deaths of an estimated 50 residents, most of them Indians. This tragedy has highlighted the poor living and working conditions of Indian migrant workers in Kuwait and the wider Gulf region. Kuwaiti authorities have launched an investigation and inspection campaigns, while the Indian government is urged to prioritize the safety and dignified living standards of its citizens abroad.

Vietnam-Singapore Industrial Park

The construction of the 16th Vietnam-Singapore industrial park commenced in Lang Son Province, Vietnam, with an expected cost of over $250 million. The project is anticipated to generate about 40,000 jobs and will be developed in three phases, with the first phase expected to be operational by the third quarter of 2025.

Recommendations for Businesses and Investors

  • Ukraine Peace Summit: Businesses and investors should monitor the outcomes of the Ukraine peace summit and subsequent negotiations. While a breakthrough may not be imminent, the potential for de-escalation and a shift in the conflict's trajectory exist.
  • China-US Tensions: The escalating tensions between China and the US pose risks and opportunities for businesses. While a direct military conflict seems unlikely, the arms build-up and strategic posturing could impact supply chains, trade relations, and market stability. Businesses should assess their exposure to these markets and consider contingency plans.
  • Kuwait Fire Tragedy: The tragedy in Kuwait underscores the need for businesses and investors to prioritize ethical labor practices and working conditions, particularly in the Gulf region. Companies should reevaluate their supply chains and ensure they uphold international labor standards and human rights.
  • Vietnam-Singapore Industrial Park: The new Vietnam-Singapore industrial park presents opportunities for businesses, particularly in infrastructure development, supply chain services, logistics, and the green economy. Businesses should explore potential investment and partnership prospects in these sectors.

Further Reading:

A peace summit for Ukraine opens this weekend in Switzerland. But Russia won't be taking part - Citizentribune

Al-Mangaf fire tragedy: The human cost of working in Kuwait - India Today

Armenia Proposes 'Joint Mechanism' With Azerbaijan To Investigate Cease-Fire Violations - Radio Free Europe / Radio Liberty

Belarusian Journalist Facing Extradition Says Fighting To 'Save My Life' - Radio Free Europe / Radio Liberty

Construction of 16th Vietnam-Singapore industrial park starts in Lang Son Province - TUOI TRE NEWS

If US-China arms build-up continues apace, demons of war will prevail - South China Morning Post

It's Not Just Russia: China Joins the G7's List of Adversaries - The New York Times

Li’s visit boosts confidence among business communities of China, New Zealand - Global Times

Minister: In 2023 Armenia was 4th in world in economic growth rate, now we have higher rate - NEWS.am

Themes around the World:

Flag

Rising Franco-German Defense and Policy Tensions

France is increasingly uneasy about Germany’s €500 billion defense buildup and growing influence in European security and industrial policy. Disputes over joint defense projects and diverging strategic priorities could affect cross-border investments and the future of European industrial cooperation.

Flag

Environmental and ESG Regulatory Shifts

Brazil’s 2025 General Environmental Licensing Law streamlines project approvals, while the EU-Mercosur deal ties market access to Paris Agreement compliance and anti-deforestation measures. These evolving ESG standards will affect investment decisions, supply chains, and compliance costs for international businesses.

Flag

Regional Security and Military Risk

US and Israeli military actions, including strikes on Iran’s nuclear facilities, and threats of further intervention, heighten regional tensions. The risk of conflict escalation or disruption of the Strait of Hormuz threatens global shipping and energy flows.

Flag

Strategic Infrastructure and Chabahar Port

Despite sanctions, Iran continues developing the Chabahar Port and North-South Transport Corridor, vital for regional connectivity and trade with India, Russia, and Central Asia. However, instability and external pressure threaten project timelines and long-term investment returns.

Flag

US-China Trade Tensions Escalate

Renewed tariff threats and secondary sanctions on China, especially over Iranian oil, have reignited US-China trade tensions. US imports from China dropped 28% and exports fell 38% in 2025, disrupting global supply chains and prompting sourcing shifts to Southeast Asia.

Flag

Political Uncertainty Ahead of Elections

Political volatility, including Parliament dissolution and upcoming elections, creates uncertainty for business operations and investment planning. Coalition dynamics and reform agendas may alter regulatory environments, affecting strategic decisions for international investors.

Flag

Semiconductor Tariffs and Industrial Pressure

The US is leveraging tariffs to coerce Korean chipmakers into expanding US-based manufacturing. Taiwan secured exemptions with $250 billion investment, while Korea faces pressure for similar commitments. These developments threaten Korea’s semiconductor sector, a cornerstone of its export economy.

Flag

Critical Minerals and Rare Earths Geopolitics

Brazil’s vast reserves of lithium and rare earths are now central to EU and US supply chain strategies, as both seek to reduce dependence on China. New agreements position Brazil as a key supplier for the global energy transition, but value addition and local benefit remain challenges.

Flag

Energy Transition and Hydrogen Leadership

Saudi Arabia is rapidly scaling investments in clean hydrogen, green ammonia, and renewables, surpassing $34 billion in energy transition spending. Major projects and international JVs are positioning the Kingdom as a future leader in low-carbon energy exports and supply chain integration.

Flag

Sanctions And Secondary Trade Risks

Sweeping new US sanctions, including up to 500% tariffs on countries buying Russian energy, intensify global trade tensions. These measures affect energy markets, complicate compliance for multinationals, and may trigger retaliatory actions, impacting cross-border investment and supply chain stability.

Flag

IMF-Driven Privatisation and Reforms

Pakistan is selling state assets and implementing governance reforms to meet IMF bailout conditions. These measures aim to reduce fiscal deficits and attract investment, but also raise concerns about job losses, social impact, and national control over strategic sectors, affecting investment strategies and market entry.

Flag

Economic Policy Tightening and Growth Outlook

Turkey maintains strict monetary policy to curb inflation, with interest rates at 36–38%. GDP exceeded $1.5 trillion in 2025, with 2026 growth projected at 3.8–4.2%. Policy stability supports investor confidence but may constrain consumer demand and credit access.

Flag

Vision 2030 Giga-Projects Acceleration

Saudi Arabia’s giga-projects, such as Qiddiya and NEOM, are advancing rapidly, with major infrastructure and entertainment investments. These projects aim to diversify the economy, create up to 85,000 jobs by 2030, and generate significant non-oil revenue, attracting global investors and supply chain partners.

Flag

Migration Surges and Border Dynamics

Political turmoil in Venezuela and regional instability are driving increased migration flows through Mexico. This strains border infrastructure, affects labor availability, and complicates regulatory compliance for businesses reliant on cross-border movement of goods and people.

Flag

Resilient but Uneven Economic Outlook

Despite global headwinds, the US demonstrates economic resilience, with steady consumer spending and moderate inflation. However, growth is uneven across sectors, and persistent trade barriers and policy shifts continue to challenge international business operations.

Flag

Military Dominance and Private Sector Constraints

The Egyptian military’s control over key economic sectors and financial reserves limits private sector growth and transparency. The IMF and investors continue to press for structural reforms and reduced military influence to unlock investment and sustainable growth.

Flag

Critical Minerals and Geoeconomic Competition

Pakistan’s rare earth and mineral sector is attracting US and Chinese interest, but faces governance, certification, and processing challenges. Despite high-value deals, lack of infrastructure and provincial disputes limit immediate supply chain impact, making the sector more a geopolitical lever than a business engine.

Flag

Trade Policy Uncertainty and AGOA Extension

The renewal of the African Growth and Opportunity Act (AGOA) provides temporary relief, but ongoing US-South Africa trade tensions and annual eligibility reviews create uncertainty. Loss of preferential access could significantly impact exports, especially in manufacturing and agriculture, affecting jobs and investment.

Flag

USMCA Review and Trade Uncertainty

The 2026 USMCA review is creating significant uncertainty for North American supply chains, especially as US President Trump has called the deal 'irrelevant' and threatened not to renew it. This could disrupt tariff-free trade, impacting automotive, electronics, and agricultural sectors.

Flag

Regulatory Modernization and Market Governance

Recent reforms have simplified foreign investor access, eliminated complex qualification barriers, and improved market transparency. However, challenges persist around regulatory clarity, governance standards, and foreign ownership limits, requiring ongoing attention from international investors and partners.

Flag

Australia–China Trade Tensions Escalate

Rising trade friction with China, including potential tariffs on steel and ongoing disputes over agricultural exports, threatens key sectors. Policy responses risk retaliation, supply chain disruptions, and market volatility, underscoring the need for diversification and robust risk management for international businesses.

Flag

Infrastructure and Resource Constraints

Taiwan faces challenges in scaling advanced manufacturing due to land, water, and power limitations. These constraints affect expansion plans for high-tech industries and may drive further overseas investment, influencing long-term industrial competitiveness.

Flag

Shifting Global Trade Power Dynamics

China’s record $1.19 trillion trade surplus in 2025, driven by exports to Africa, Southeast Asia, and Latin America, signals a shift in global trade power. The US faces challenges to its traditional dominance, impacting investment strategies and market access for multinationals.

Flag

Investment Strategy Reboot Needed

Thailand’s government and industrial leaders call for reforms to attract high-value FDI in sectors like high-tech, green infrastructure, and wellness tourism. Streamlined processes, legal transparency, and infrastructure upgrades are essential for regaining competitiveness and sustainable growth.

Flag

USMCA Uncertainty and Trade Tensions

The 2026 review of the USMCA (T-MEC) creates major uncertainty for Mexico’s trade and investment climate. US threats to let the agreement lapse or impose new tariffs could disrupt supply chains, especially in automotive and manufacturing, impacting billions in cross-border trade.

Flag

Market Volatility Hits Finnish Equities

Finnish stock markets, including major exporters like Nokia and Wärtsilä, saw declines of 3–5% following tariff threats. Investor sentiment has turned risk-averse, with increased volatility and defensive asset rotation affecting capital flows and corporate valuations.

Flag

Labor Market Transformation and Demographic Advantage

Vietnam’s young population and rising labor productivity underpin its competitiveness. The government is prioritizing workforce upskilling, digital transformation, and social equity, aiming to sustain productivity growth above 8.5% annually (2026-2030) and maintain its position as a leading manufacturing hub.

Flag

China-Pakistan Economic Corridor Acceleration

CPEC Phase 2.0 is being fast-tracked amid global supply chain disruptions and regional security threats. China’s planned $10 billion investment and new infrastructure projects position Pakistan as a pivotal trade gateway, but success hinges on security, regulatory clarity, and regional stability.

Flag

Currency Volatility and Baht Strength

The Thai baht appreciated over 8% in 2025, harming export competitiveness and squeezing margins for manufacturers. Persistent currency volatility, driven by capital flows and digital assets, complicates pricing, hedging, and investment planning for international businesses operating in Thailand.

Flag

EU-US Trade Deal at Risk

The tariff dispute jeopardizes the recently negotiated EU-US trade agreement. Suspension or collapse of the deal would undermine market access, investment flows, and regulatory cooperation, with broad negative implications for Finnish and European businesses.

Flag

Stagnant Growth and Deindustrialization Risks

Germany faces its third year of economic stagnation, with GDP declining by 0.2% in 2024. High taxes, energy costs, and regulatory burdens have triggered capital outflows and job losses, particularly in manufacturing, threatening Germany’s status as Europe’s industrial engine.

Flag

Regional Integration and Infrastructure Investment

South Africa’s strategic position in Africa is enhanced by regional trade initiatives and infrastructure reforms, including public-private partnerships in energy and logistics. These efforts support supply chain diversification and position the country as a gateway to the continent’s growing markets.

Flag

US Foreign Investment Scrutiny Rises

Foreign investment in the US faces heightened scrutiny, particularly in strategic sectors and from Chinese investors. Regulatory barriers and national security reviews are increasingly shaping cross-border M&A, technology transfers, and capital flows.

Flag

Structural Economic and Regulatory Reforms

South Korea’s 2026 economic strategy emphasizes structural reforms, regulatory streamlining, and industrial innovation. These efforts aim to sustain growth, improve the investment climate, and address underlying challenges such as low productivity, labor market rigidity, and demographic shifts.

Flag

Widespread Civil Unrest and Political Instability

Nationwide protests over economic collapse and political repression have resulted in hundreds of deaths and thousands of arrests. The instability has led to internet shutdowns and business disruptions, significantly raising operational and security risks for foreign firms.

Flag

Resilient US Economic Growth Amid Global Shocks

Despite trade barriers and geopolitical uncertainty, the US economy continues to show resilience, with GDP growth above 4% in late 2025. This underpins global demand, supports the dollar, and attracts foreign investment, but also raises questions about sustainability and sectoral disparities.