Mission Grey Daily Brief - June 20, 2024
Summary of the Global Situation for Businesses and Investors
The global situation remains complex and dynamic, with ongoing geopolitical tensions, economic shifts, and social unrest shaping the landscape. Notable developments include Russia's deepening ties with North Korea, Finland's controversial plan to curb migration from Russia, France's military cooperation with Armenia, and the impact of the US-China rivalry on the Philippines. Meanwhile, the human rights situation in Myanmar remains dire, and press freedom is under threat in Ukraine and Ecuador.
Russia-North Korea Alliance
Russian President Vladimir Putin's visit to North Korea underscores the strengthening alliance between the two countries, as they seek to counter US-led sanctions. Putin expressed appreciation for North Korea's support of Russia's invasion of Ukraine and vowed to cooperate to establish a "multi-polarized world order." This development has heightened tensions on the Korean Peninsula, with increased military activity and psychological warfare between the two Koreas. The US and its allies have expressed concern over the potential arms arrangement between Russia and North Korea, which could impact the security situation in the region.
Finland's Migration Policy
Finland's parliament is set to approve a controversial proposal to temporarily reject asylum seekers arriving from Russia, citing national security concerns. This move comes amidst accusations that Russia has been encouraging asylum seekers to cross the border as retaliation for Finland's support for Ukraine. While the plan has been justified as a temporary emergency measure, it contradicts international human rights agreements and sets a concerning precedent. The decision has sparked debate and highlights the complex challenges faced by countries in managing migration flows.
France-Armenia Military Ties
France has signed a contract to sell CAESAR self-propelled howitzers to Armenia, marking a shift in Yerevan's diplomatic and military ties away from Russia. This development comes as Armenia seeks to strengthen its military capabilities and move closer to Western countries, accusing Russia of failing to protect it from rival Azerbaijan. The sale of military equipment underscores France's support for Armenia and its role as a key European backer.
US-China Competition in the Philippines
A controversial report alleging a US military disinformation campaign to discredit China's Sinovac vaccine during the COVID-19 pandemic has sparked outrage in the Philippines. Filipino officials have called for an inquiry, and analysts warn that the incident could damage trust in the US and benefit China in their geopolitical rivalry for influence in the region. The US Defense Department suggested the effort was aimed at countering Chinese "malign influence campaigns." The incident highlights the complexities of the US-China competition and its impact on Southeast Asia.
Recommendations for Businesses and Investors
- Russia-North Korea Alliance: Businesses with operations or investments in Northeast Asia should closely monitor the evolving Russia-North Korea relationship, particularly the potential arms arrangement. The transfer of military technology and resources between the two countries could have significant implications for regional security and sanctions enforcement.
- Finland's Migration Policy: Businesses operating in Finland or with interests in the country should be aware of the potential impact of the new migration policy on their workforce and supply chains. While the policy aims to address security concerns, it may also affect labor markets and disrupt certain industries that rely on migrant workers.
- France-Armenia Military Ties: The France-Armenia military cooperation presents opportunities for defense contractors and technology providers to explore potential partnerships and supply chain diversification. Businesses should monitor the implementation of the agreement and assess the potential for new commercial ventures or joint ventures in the region.
- US-China Competition in the Philippines: Companies operating in the Philippines or with exposure to the Southeast Asian market should factor in the impact of the US-China rivalry on their business strategies. The competition for influence between the two powers may create opportunities for diversification and expansion, particularly in sectors such as technology, trade, and infrastructure development.
Further Reading:
Australia's prime minister raises journalist incident with China's Li - Yahoo News Canada
Drug-related violence fuels an exodus of Ecuador’s press - Committee to Protect Journalists
Egypt Unlawfully Deported Sudanese Refugees, Rights Group Says - U.S. News & World Report
Explaining Brazil #298: Global ambitions, domestic neglect? - The Brazilian Report
France Says It Will Sell CAESAR Howitzers to Armenia - U.S. News & World Report
How will Denmark impede Russia's shadow oil fleet in the Baltic Sea? - Offshore Technology
In Philippines, experts warn anger over US anti-vax report could hurt ties - This Week In Asia
In Ukraine, Narrowing Press Freedoms Cause Growing Concern - The New York Times
Themes around the World:
Automotive Sector Faces Structural Pressures
Germany’s auto industry is hit by US tariffs, fierce Chinese competition, and the costs of electrification. New EV subsidies help, but also benefit Chinese brands, raising concerns about domestic market share and the effectiveness of industrial policy.
Cross-border data and security controls
Data security enforcement and national-security framing continue to complicate cross-border transfers, cloud architecture, and vendor selection. Multinationals must design China-specific data stacks, strengthen incident reporting, and anticipate inspections affecting operations, R&D collaboration, and HR systems.
Labor Market and Talent Dynamics
Taiwan’s advanced manufacturing sector is experiencing labor shortages and competition for engineering talent, exacerbated by global expansion. Demographic trends and workforce development are critical factors for sustaining innovation and operational resilience.
Trade Policy and New Agreements
Saudi Arabia is actively negotiating new trade agreements and positioning itself as a connector economy. These efforts are expected to open markets, facilitate cross-border commerce, and drive moderate earnings growth, benefiting international exporters and importers.
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.
ESG, Regulatory, and Investment Climate
Taiwan’s evolving regulatory landscape, with a growing focus on ESG and sustainable development, shapes investment strategies. Infrastructure modernization and compliance with international standards are increasingly important for attracting capital and maintaining global market access.
Energy Transition And Renewables Expansion
Khanh Hoa and other provinces are advancing large-scale renewable energy projects, including wind, solar, and nuclear. National policies support the shift to green energy, grid stability, and green hydrogen, enhancing Vietnam’s energy security and export potential in the clean tech sector.
China decoupling in advanced tech
Tightened export controls and new duties on advanced semiconductors/AI chips are reshaping global electronics supply chains. Firms face licensing, compliance, and redesign costs, while China accelerates substitution. Expect higher component prices, longer qualification cycles, and intensified scrutiny of technology transfers.
Global Supply Chain Realignment
US tariff policies and geopolitical frictions have accelerated the diversification of supply chains away from China. Southeast Asian countries, notably Indonesia and Thailand, gained significant US sourcing share in 2025, reshaping manufacturing and logistics strategies for international businesses.
Visa Incentives And Talent Mobility
New government decrees grant time-limited visa exemptions for foreign experts, streamlining entry and enhancing Vietnam’s attractiveness for international talent. This policy supports research, innovation, and high-value investment, facilitating knowledge transfer and business expansion.
Escalating US-EU Trade Tensions
The US has threatened significant tariffs on French and European goods, notably a 10–25% levy linked to the Greenland dispute and a proposed 200% tariff on French wines. These measures risk disrupting transatlantic trade, impacting automotive, luxury, and technology sectors, and prompting potential EU retaliation.
Sanctions Enforcement and Maritime Security
France has intensified enforcement of sanctions against Russia’s shadow oil fleet, including high-profile naval seizures. This escalates geopolitical risks in maritime trade, raises insurance costs, and could provoke Russian retaliation, affecting global shipping and energy supply chains.
Semiconductor Industry Resilience and Expansion
Japan is rapidly expanding its semiconductor sector, attracting major investments such as TSMC’s Kumamoto plant and boosting domestic equipment and materials suppliers. This is part of a broader strategy to strengthen supply chain resilience, reduce China dependence, and capitalize on global AI and automotive demand.
Critical minerals alliance reshaping
Canberra’s A$1.2bn Critical Minerals Strategic Reserve (initially gallium, antimony, rare earths) and deeper US-led cooperation (price floors, offtakes) are accelerating non‑China supply chains, creating investment openings but higher compliance, geopolitical and pricing-policy risk for manufacturers.
Currency Volatility and Capital Controls
The ruble’s real effective exchange rate surged 28% in 2025, driven by a trade surplus and high interest rates. While this curbed inflation, it hurt export competitiveness and budget revenues, complicating financial planning for foreign investors and multinational operations.
Canada-China Strategic Trade Pivot
Canada’s new agreement with China lowers tariffs on Chinese EVs and secures reduced Chinese tariffs on Canadian agriculture. This shift diversifies trade but risks US retaliation, reshapes supply chains, and could attract Chinese investment in Canadian manufacturing and energy sectors.
Shifting Global Trade Alliances
US unpredictability has accelerated trade realignments, with the EU and India finalizing deals and Germany increasing investment in China. Major economies are hedging against US volatility by building alternative trade frameworks, reducing reliance on American markets and supply chains.
Rules-Based Order Fragments Globally
Canadian leadership now openly acknowledges the collapse of the traditional rules-based international order. This fragmentation increases uncertainty for multinational firms, as trade, finance, and supply chains become tools of geopolitical leverage rather than predictable frameworks.
SME Support and Anti-Corruption Drive
High household debt, limited SME access to finance, and persistent corruption are key policy targets. Political parties propose credit reforms, anti-corruption platforms, and business facilitation measures, which are vital for improving the investment climate and supporting supply chain resilience.
Renewable Energy and Digital Economy Push
Egypt is leveraging its geographic advantages to become a regional leader in renewable energy and digital infrastructure. Major investments in solar, green hydrogen, and digital trade platforms are attracting international partnerships and supporting the country’s green transition and export competitiveness.
Capital markets and divestment pressure
Public debate and legal threats around investing in Israeli bonds illustrate rising ESG, fiduciary and litigation risks for investors. Corporates may face shareholder resolutions, banking de-risking or higher funding costs, requiring transparent use-of-proceeds, enhanced disclosures and stakeholder engagement.
Canada Pursues Strategic Trade Diversification
Canada is rapidly diversifying trade and investment partnerships, signing 12 new deals across four continents, including with China, the EU, and Qatar. This shift reduces reliance on the US market, but raises exposure to new geopolitical risks and regulatory complexities for international businesses.
Labor Market Structural Transition
Taiwan’s labor market is undergoing structural change, driven by AI adoption, precision workforce planning, and geopolitical uncertainty. Companies face talent shortages in high-tech sectors and must adapt hiring strategies to remain competitive in a rapidly evolving environment.
Federal Reserve Policy and Political Pressure
The Federal Reserve has paused rate cuts at 3.6%, balancing persistent inflation (2.8%) and labor market stagnation. Political pressure from President Trump to lower rates and ongoing investigations into Fed leadership have raised concerns about central bank independence. Market expectations for further cuts in 2026 are muted, with Fed credibility and leadership transitions under intense scrutiny—factors that directly impact capital flows, currency valuation, and investment strategies.
EV and Battery Ecosystem Expansion
Indonesia is rapidly developing an integrated EV and battery ecosystem, attracting major foreign investment. Over $7 billion is being invested in battery supply chains, with EV-related investment reaching 15.5% of total FDI, positioning Indonesia as a regional hub.
Sanctions Enforcement Expands Globally
US sanctions enforcement has intensified, targeting entities and behaviors beyond traditional lists. Secondary sanctions, especially related to Iran and Russia, are increasingly used, raising compliance risks for multinationals and complicating cross-border transactions and supply chains.
Labor Market Reforms and Corporate Impact
South Korea is enacting sweeping labor reforms to extend protections to up to 8.6 million freelancers and platform workers. While aiming to reduce inequality, these measures could increase compliance costs, heighten labor market rigidity, and accelerate automation in business operations.
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.
Resilient Foreign Investment Attractiveness
France recorded an 11% rise in foreign investment decisions in 2025, supporting 48,000 jobs, with the EU and US as key sources. Despite high public debt and political tensions, France’s diversified sectors—especially AI, automotive, and renewables—remain attractive for international investors.
UK as a Stable Investment Destination
UK leaders are leveraging global volatility to position the country as a haven for investment, emphasizing regulatory stability, financial sector strength, and innovation in AI and tech. This narrative aims to attract capital and talent, but is tested by ongoing geopolitical shocks.
Energy Independence and Import Reduction
The government is aggressively pursuing energy independence by reducing fuel imports through refinery upgrades, biofuel mandates, and new gas infrastructure. These efforts aim to lower import bills, stabilize the rupiah, and create new opportunities for energy sector investment.
Security Risks and US-Mexico Tensions
Escalating cartel violence and threats of US military intervention heighten operational and reputational risks. Security remains a top concern for international businesses, with border volatility, supply chain disruptions, and diplomatic tensions affecting investment confidence and cross-border logistics.
Energy Cooperation and Gas Exports Advance
Israel is deepening energy partnerships, notably with Cyprus, to jointly develop offshore gas fields. These projects are central to regional energy strategies and offer significant opportunities for international investment, but remain sensitive to geopolitical shifts and security risks.
Currency strength amid weak growth
The rand has rallied roughly 13% year-on-year despite sub-50 manufacturing PMI readings, reflecting global liquidity and carry dynamics more than domestic fundamentals. For multinationals, volatility risk remains: earnings translation, import costs and hedging needs can shift quickly on risk-off shocks.
Escalating US-EU Trade Tensions
The threat of US tariffs on French and European exports, notably over the Greenland dispute, poses major risks to France’s automotive, luxury, and manufacturing sectors. Retaliatory EU measures could disrupt transatlantic trade, impacting supply chains, investment flows, and market access.
Import quotas for fuels tighten
Indonesia’s import caps are affecting private retailers, with Shell reporting work with government on 2026 fuel import quotas amid station shortages. Coupled with policy to stop diesel import permits for private stations, firms face supply disruptions, higher working capital needs, and reliance on Pertamina.