Mission Grey Daily Brief - July 10, 2025
Executive Summary
The global stage is experiencing a turbulent 24-hour period marked by dramatic shifts in U.S. economic policy, escalatory rhetoric and violence in Ukraine, and a deepening humanitarian crisis in Gaza. The U.S. under President Trump has reignited global trade uncertainty by introducing sweeping new tariffs, resulting in record commodity price surges and widespread concern over supply chain disruptions. Meanwhile, the Russia-Ukraine conflict has sharply escalated, with Russia launching its largest drone and missile barrage on Ukraine just hours after President Trump publicly condemned Vladimir Putin and pledged renewed military support for Kyiv. The ongoing Gaza conflict continues to inflict severe tolls on civilians, and the unstable geopolitical climate is undermining investor confidence and long-term business planning, with ripple effects felt from Asia to Europe and Africa.
Analysis
1. U.S. Trade War: Rising Tariffs and Global Instability
President Donald Trump has pushed global markets back into a state of high uncertainty by announcing sweeping new tariffs across a range of commodities and countries. The most headline-grabbing move is a 50% tariff on imported copper—sending U.S. copper futures up 13% in a single day, the biggest spike on record—with a potential 200% tariff on pharmaceuticals soon to follow. Trump’s “90 deals in 90 days” tariff blitz, meant to rapidly recast U.S. trade relationships, has so far produced only a handful of preliminary arrangements, most notably with Vietnam and the United Kingdom, while negotiations with key partners such as China, Japan, South Korea, and the EU drag on. The administration has now extended the tariff deadline to August 1, buying scant time for more deals and prolonging uncertainty for thousands of global suppliers and countless businesses that depend on stable trade flows [US copper price...][Trump’s Trade W...][Uncertainty Gro...][Tariffs could s...][Status Of U.S. ...][Trump's tariff ...][Trump says he's...].
The United Nations has issued a pointed warning: the pause offers only fleeting relief, and the uncertainty is stifling investment, upending supply chains, and eroding predictability—“the one thing businesses need more than anything else.” Manufacturing sectors worldwide brace for cost surges, with experts noting that tariffs will be inflationary in the United States and deflationary internationally. Southeast Asian countries are particularly exposed, as the U.S. targets them for allegedly facilitating the trans-shipment of Chinese goods to evade tariffs [Trump's tariff ...][Trump's tariff ...]. The trade crackdown is also creating palpable unease among close allies—59% of Canadians now view the U.S. as their top threat, up from 20% just a few years ago [Trump's America...].
Looking ahead, if further deals cannot be struck by August 1, country-specific tariffs ranging from 10% to 50% will snap back into effect. Sectors reliant on copper, pharmaceuticals, and semiconductors face acute disruption. For global firms, especially those in complex supply chains, contingency planning and diversification have become imperative.
2. Russia Escalates War on Ukraine Amid U.S. Policy Pivot
Just hours after President Trump, in a striking policy reversal, publicly rebuked Russian President Vladimir Putin for “lying” about his intentions in Ukraine and pledged additional weapons for Kyiv, Russia unleashed its largest drone and missile strike since the start of the war. A record 728 drones and 13 missiles were fired at Ukrainian territory, with most intercepted but some causing lethal damage in western regions near NATO’s eastern borders. The escalation follows repeated criticism that Trump’s tilt toward détente with Moscow had weakened Ukraine’s position, raising European anxieties about U.S. commitment [I am not happy ...][Trump Just Call...][Why Trump's Att...][Another day, an...][Putin launches ...][NATO jets scram...].
While President Trump now claims stronger support for Ukraine, both European leaders and market analysts remain skeptical about the sustainability and depth of this pivot. The weapons supply pause announced by the Pentagon last week—later countermanded by Trump—exposed disarray within the U.S. government and eroded trust among partners [Why Trump's Att...]. The Moscow blitz also appears to be a muscular message to the U.S. and Europe that Russia retains escalation dominance, even as sanctions and military pressure mount.
With the war entering its most destructive phase yet, and negotiations between Russia and Ukraine stalled, the likelihood of a quick diplomatic breakthrough is fading. As the U.S. mulls further sanctions—including a potential 500% tariff on nations buying Russian oil and uranium—markets should brace for retaliatory moves and persistent volatility in energy and commodity prices [I am not happy ...][Why Trump's Att...].
3. Humanitarian Crisis Intensifies in Gaza; Global Response Falters
In the Middle East, the situation in Gaza continues to deteriorate as escalating violence and a breakdown of basic services push the enclave to the brink. The International Committee of the Red Cross warned that Gaza’s healthcare system is on the verge of collapse, with hundreds killed at aid distribution centers and hospitals rationing critical supplies. Negotiations for a cease-fire, mediated through Qatar, are in stasis, with Israeli demands and the ongoing humanitarian catastrophe rendering progress difficult [Report: Trump t...][News headlines ...][Wednesday brief...].
The potential for forcible displacement and the specter of war crimes allegations against Israel loom large, while the risk of regional spillover remains acute due to the involvement of Hezbollah and, indirectly, Iran. International investors and humanitarian organizations confront heightened risks not only in Gaza, but across conflict-affected regions from Sudan to Yemen.
4. China’s Fragile Recovery and Regulatory Pressures
New economic data from China points to continued deflationary pressures in manufacturing, with the Producer Price Index dropping 3.6% year-over-year in June. Despite government stimulus, domestic demand remains muted. Beijing’s crackdown on “excess capacity” and ongoing price wars in segments like instant commerce and autos reflect a broader interventionist approach in the economy, posing added risks for multinationals operating in China or depending on Chinese manufacturing [China Market Up...]. These economic headwinds, coupled with U.S. trade aggression, signal that decoupling and realignment of Asia-centric supply chains will only accelerate.
Conclusions
The past day has highlighted how swift policy shifts and headline-driven geopolitics are fostering an age of profound uncertainty. Both established democracies and emerging economies are caught in a vortex of disruptive trade policies, renewed conflict, and humanitarian crises.
The new U.S. tariff regime—ostensibly aimed at leveling the playing field but fraught with unpredictability—poses hard questions for businesses: How resilient are your supply chains to sudden shocks? Can your operations withstand radical swings in policy and demand? Are you diversified enough to mitigate risks from authoritarian markets prone to weaponizing trade or information?
Meanwhile, the escalation in Ukraine and the Gaza catastrophe remind us that the stakes of international engagement are not just economic, but profoundly human. As aggressive regimes like Russia and Iran entrench themselves, the imperative for ethical, well-informed business decisions has never been stronger.
Thought-provoking questions for business leaders:
- Is your organization prepared to operate in an era where traditional alliances and rules-based systems are under unprecedented strain?
- How can you ensure both ethical sourcing and resilience against authoritarian-driven disruptions?
- With global institutions showing signs of strain, where can businesses find the stability and partnerships they need to grow?
Mission Grey Advisor AI will continue to monitor these fast-moving developments to help you make informed, values-driven decisions in a challenging global landscape.
Further Reading:
Themes around the World:
Monetary Policy and Economic Stagnation Risks
High interest rates, maintained to combat inflation driven by military spending, are stifling economic growth and investment. Sberbank and other officials warn that unless rates are cut significantly, Russia risks recession or prolonged stagnation. The overvalued ruble further harms exporters, while tight monetary policy dampens corporate profits and business activity.
South Korean Investment and Stock Market Optimism
South Korean investors have significantly increased holdings in Vietnamese stocks, driven by robust economic growth and reduced tariff uncertainties. The ACE Vietnam VN30 ETF saw strong inflows, reflecting confidence in Vietnam's market potential. Anticipation of Vietnam's upgrade from frontier to emerging market status by FTSE Russell further fuels investor enthusiasm, although market corrections remain a risk.
Political Instability and Judicial Crackdown
The government's aggressive crackdown on opposition parties, including removal of CHP officials and detentions, has triggered market sell-offs and investor unease. Political interference in judiciary and media censorship undermine institutional independence, increasing country risk and potentially deterring foreign investment and complicating business operations.
Political Instability in Neighboring France
France’s political crisis and high public debt create economic uncertainties affecting German companies with significant exposure to the French market. Rising risk premiums on French debt and potential government instability could disrupt cross-border trade and investment flows within the Eurozone.
Turkish Port Ban Disrupting Trade Logistics
Turkey's reported ban on Israeli-linked vessels threatens to disrupt short-sea container shipping between the two countries, affecting at least 76 container ships and causing delays at key Israeli ports. This logistical disruption could increase costs, complicate supply chains, and impact Israel’s trade flows with Europe and the Mediterranean region.
Activist Investors Reshape U.S. Business Landscape
New activist investors are prompting strategic reassessments across major U.S. corporations, influencing governance and operational decisions. This shake-up occurs amid broader political tensions and economic uncertainties, affecting business confidence and investment strategies.
Impact of U.S. Tariffs on Vietnam
U.S. tariffs, initially set at 46% and later reduced to 20%, have moderately affected Vietnam's export-driven manufacturing economy. Key sectors like machinery and textiles face challenges, with uncertainties around transshipment rules complicating trade. Despite this, Vietnam is diversifying export markets and maintaining growth, though risks remain for trade-dependent industries.
US Dollar Dynamics and Forex Market Impact
The US dollar exhibits unusual resilience despite expectations of weakening due to Fed easing. Geopolitical events and monetary policy shifts cause significant currency fluctuations, affecting international trade costs and investment returns. Forex market volatility demands sophisticated risk management strategies for multinational corporations and investors.
China's Covert Oil Imports
China remains Iran's dominant crude oil buyer, importing about 90% of Iran's exports through covert means, including relabeling shipments. This discounted oil supply is critical for China's energy security but vulnerable to disruption from sanctions snapback, risking supply shocks, increased costs, and geopolitical tensions affecting global energy markets.
Consumer Spending and Economic Growth
Household consumption in Australia has strengthened, supported by recent interest rate cuts and improving consumer sentiment. This uptick in spending is a key driver of GDP growth, signaling a potential economic recovery that could enhance market opportunities for domestic and foreign businesses.
Foreign Investment Sentiment and Market Dynamics
Despite political risks, Thai institutional investors maintain cautious optimism, favoring equities in developed markets and domestic sectors like finance, healthcare, and tourism. Foreign investor outflows have slowed, with improved sentiment following political transitions. However, concerns over global geopolitical tensions and trade conflicts persist, influencing investment strategies and capital flows.
US-Brazil Trade Tensions Escalate
The US imposed 50% tariffs on Brazilian goods, citing institutional and political concerns linked to Brazil's alignment with China and BRICS. This trade friction risks disrupting bilateral commerce, affecting exports, investor confidence, and potentially leading to retaliatory measures, thereby complicating Brazil's trade dynamics and regional economic stability.
Egyptian Exchange Market Dynamics
The EGX experienced mixed performance with foreign inflows supporting gains despite profit-taking and global volatility. Recent rate cuts and leadership changes aim to boost liquidity and market depth, with reforms targeting IPO incentives and new financial instruments. These factors influence capital market access and investment strategies within Egypt's evolving financial landscape.
Economic Growth Outperformance
Turkey's GDP growth in Q2 2025 outpaced major European economies, driven by construction and IT sectors with a 4.8% annual increase. This robust growth signals strong domestic demand and investment, enhancing Turkey's attractiveness for trade and investment despite underlying inflation and political risks.
Stock Market Recovery and Investment Opportunities
The Pakistan Stock Exchange has shown strong performance with the KSE-100 index surging nearly 90% over 12 months, driven by corporate earnings growth and stabilizing macroeconomic conditions. Undervalued equities present potential for a generational bull run, supported by easing monetary policy and improved investor sentiment, though political and economic risks remain significant.
Escalating Regional Military Tensions
Iran's involvement in regional conflicts, including missile exchanges with Israel and military cooperation with Russia and North Korea, heightens geopolitical risks. These developments provoke further sanctions and destabilize the region, complicating foreign investment and increasing operational risks for businesses engaged in Iran and neighboring markets.
Diplomatic Efforts and International Relations
Iran's diplomatic maneuvers, including resistance diplomacy and engagement with Security Council members, aim to mitigate sanctions impact and garner international support. However, internal political divisions and strained relations with Western nations complicate these efforts, influencing the geopolitical risk environment for investors and trade partners.
China's Expanding Economic Influence
A study reveals China's influence in Indonesia's economy at 41.2%, encompassing trade, investment, and infrastructure. Concentrated mainly in western and central provinces, China's footprint extends to social, political, and academic domains. This growing presence shapes Indonesia's economic landscape and bilateral relations, with implications for sovereignty and strategic autonomy.
Bond Market Volatility and Yield Spreads
The yield spread between French and German 10-year bonds has widened to 80 basis points, reflecting investor concerns over political and fiscal risks. Elevated borrowing costs increase debt servicing burdens, potentially crowding out public investment. Market volatility may deter foreign investment and exacerbate fiscal pressures, with credit rating agencies poised to reassess France's sovereign rating.
Geopolitical Instability and Political Risk Insurance
Heightened geopolitical tensions and economic fragmentation have led to significant investment losses for UK businesses abroad. Demand for political risk insurance (PRI) has surged, mitigating losses and lowering capital costs in emerging markets. However, lack of awareness limits uptake. PRI adoption is critical for protecting international investments and sustaining global trade amid rising geopolitical uncertainties.
Business Confidence and Tariff Pressures
Business confidence has declined due to the imposition of 30% US tariffs on South African exports, the highest in Sub-Saharan Africa. This has disrupted sectors such as automotive manufacturing, leading to production breaks and cancellations, thereby dampening investment sentiment and complicating trade relations with key partners.
Federal Budget and Infrastructure Investment Plans
Prime Minister Mark Carney's upcoming budget aims to balance austerity with new investments, including major infrastructure projects and increased defense spending. These initiatives are designed to catalyze private investment and support economic growth but may also introduce fiscal constraints affecting business operations and public-private partnerships.
Economic Instability and Debt Crisis
Pakistan faces severe economic instability with public debt exceeding PKR 80 trillion and a debt-to-GDP ratio nearing 80%. Inflation remains high at around 29%, with food inflation surpassing 35%, eroding purchasing power and fueling public unrest. Reliance on IMF loans and external borrowing creates unsustainable fiscal pressures, deterring long-term investment and increasing default risk.
Political Instability and Leadership Transition
Prime Minister Shigeru Ishiba's resignation has triggered political uncertainty in Japan, impacting investor sentiment and market volatility. The leadership race within the ruling Liberal Democratic Party (LDP) introduces risks of policy shifts, particularly regarding fiscal expansion and monetary easing. This instability affects currency valuations, bond yields, and foreign investment flows, complicating Japan's economic outlook and trade relations.
Brazil's Economic Performance and Monetary Policy
Brazil's GDP grew 0.4% in Q2 2025, driven by services and extractive industries, despite a slowdown from Q1. High interest rates (Selic at 15%) and investment declines persist, but household consumption remains resilient. The Central Bank's monetary policy and US interest rate decisions critically influence capital flows, exchange rates, and investment climate in Brazil.
Geopolitical Influence in Africa
Turkey is expanding diplomatic, economic, and military ties across Africa, positioning itself as a strategic partner to counter Chinese and Russian influence. This growing soft power and defense cooperation open new trade and investment avenues but also introduce geopolitical complexities for international stakeholders.
Record Foreign Direct Investment Inflows
Egypt ranked 9th globally and 1st in Africa for FDI, attracting $46.1 billion in 2023-2024. This surge is driven by a large labor force, strategic location, tax incentives, and trade agreements, positioning Egypt as a regional investment hub with transformative potential for exports and job creation.
Geopolitical Risks in Metals Market
China's Zijin Mining highlights unprecedented global uncertainties in critical metals markets due to rising protectionism, trade barriers, and geopolitical conflicts. These risks threaten metal prices, revenues, and overseas projects, impacting global supply chains and investment strategies in critical minerals like copper, gold, and lithium.
Foreign Investment in Vietnam's Real Estate via M&A
Vietnam's real estate sector is attracting increasing foreign investment through mergers and acquisitions, driven by improved legal transparency and macroeconomic stability. Cooperative deals dominate, with investors prioritizing projects with clear legality and ESG compliance. However, overlapping land laws and dispute resolution challenges remain barriers, necessitating strategic partnerships with local firms for successful market entry.
Geopolitical and Regulatory Risks in Tech Sector
South Korea faces potential trade clashes due to new digital trade legislation perceived as discriminatory against US tech firms, while Chinese tech companies remain less affected. This regulatory environment risks escalating tensions with the US, impacting technology investments and bilateral trade relations. The situation necessitates balancing domestic policy objectives with international trade commitments to avoid economic fallout.
Growth of Forex Trading and Regulation
Forex trading in South Africa has become mainstream, driven by rand volatility and increased retail participation. Regulatory tightening under the FSCA aims to protect investors and improve market integrity, presenting new opportunities and risks for traders, businesses, and financial institutions engaged in currency markets.
India-Nepal Political Crisis and Economic Risks
Nepal's political unrest disrupts cross-border trade and supply chains, affecting Indian FMCG companies and investments. The crisis accelerates Chinese influence in Nepal, threatening India's economic and strategic interests in the region. Energy cooperation and infrastructure projects face delays, while security concerns rise, necessitating strong diplomatic efforts to maintain regional stability and protect India's economic footprint.
M&A Activity Amid Turmoil
Despite political and economic uncertainties, France remains an attractive M&A destination due to its strategic sectors like energy and luxury goods. Goldman Sachs anticipates increased deal activity in H2 2025, reflecting investor confidence in France's long-term market potential, which supports cross-border investments and supply chain integration.
Clean Energy Investment Surge
Significant investments by global asset managers in Australia's renewable energy sector, particularly solar and battery storage, are accelerating. Supported by government targets for renewables, these investments are reshaping Australia's energy landscape, offering new opportunities and risks for investors and supply chains in the clean energy transition.
Political Instability in Neighboring France
France's high public debt and political instability, including contested austerity reforms, pose risks for German companies heavily exposed to the French market. Potential government changes and fiscal uncertainty could disrupt cross-border trade and investment, necessitating cautious risk assessment by German businesses.
M&A Market Shift Towards High-Value Deals
UK merger and acquisition activity declined in volume and value amid market volatility, with investors prioritizing fewer but larger, high-quality deals focused on resilient sectors like industrials, financial services, and technology. This cautious approach reflects uncertainty but also highlights opportunities for strategic investments that can drive long-term growth once macroeconomic and geopolitical risks stabilize.