Mission Grey Daily Brief - December 26, 2025
Executive summary
As 2025 draws to a close, the world finds itself poised between uncertainty and opportunity, with major powers maneuvering through a transformed geopolitical and economic landscape. The past 24 hours have continued to reflect a moment of intense flux: global markets are winding down for the holidays after a year of relentless volatility and AI-driven growth, conflict zones remain on edge, and renewed fault lines are evident from Europe to Asia, the Middle East, and Latin America. Meanwhile, the race in frontier technologies, energy, and climate adaptation accelerates, underlined by persistent questions over democratic resilience and the ethical grounding of state actors. This brief examines the most impactful developments shaping the global risk environment as we head into 2026: the recalibration of great power competition—particularly among the United States, China, and Russia; the turbulent energy and technology markets; and regional flashpoints raising humanitarian and supply chain challenges.
Analysis
1. Great Power Resets: U.S., China, Russia, and the "New Multipolarity"
The year is ending with sharper definition of global blocs and rising uncertainty. The U.S. under President Trump projects a more hemispheric vision—evidenced by new assertive moves in the Caribbean and South America (notably a major military presence off Venezuela in an attempt to force regime change) and a recalibration of engagement with European and Asian allies. Russia, meanwhile, remains bogged down in Ukraine but has shown no signs of backing down, with continued hostilities and economic resilience despite enormous casualties and strategic failures on the battlefield. China and the U.S. remain locked in existential rivalry, with Taiwan’s security and the semiconductor supply chain at the center of new arms sales, technology restrictions, and trade brinkmanship. President Trump’s planned summit in Beijing will be a defining early event in 2026, its outcome influencing Taiwan’s future, the global AI race, and potentially the fabric of the international order itself. The ambiguity of current U.S. strategic commitments in Eurasia has created anxiety among democratic allies about Washington's long-term resolve, while the Russia-China-North Korea-Iran axis (sometimes dubbed 'CRINK') openly coordinates for influence and wedges against the free world order. This shifting superpower landscape intensifies risk calculation for multinationals, especially those with supply chain, technology, or energy exposure in the Indo-Pacific, Europe, and Latin America. [1][2][3]
2. Markets and the AI/Tech Economy: Rally Meets Skepticism
The holiday week sees battered markets returning to optimism as U.S. indices close at record highs; the S&P 500 notched its fourth consecutive session of gains, buoyed by better-than-expected Q3 GDP growth (+4.3% annualized) and persistent consumer demand, with AI-driven Big Tech stocks (Microsoft, Nvidia, and Amazon) pacing the global rally. But this optimism is balanced by underlying volatility: thin liquidity, high valuations, and nagging doubts about whether Big Tech’s massive AI infrastructure spending will be justified by future profits. For example, Microsoft’s year-end moves—including a $400 million data center in Texas—reinforce aggressive long-term AI strategies, yet investors are increasingly sensitive to regulatory risks, rate fluctuations, and signs of slowing enterprise AI adoption. China’s tech sector, open through the holidays, continues to close the gap on key AI benchmarks, feeding U.S. policy debates over export controls versus engagement. Looking into 2026, the question is whether the “AI revolution” translates into durable, broad-based prosperity or a bubble, with cyclical downturns possible if the Fed’s rate cuts disappoint or if regulation strengthens in the U.S. and Europe. [4][5][3]
3. Conflict Zones and Supply Chain Disruption: Humanitarian, Geopolitical, and Ethical Faultlines
Conflict and instability continue to cascade across several continents. The Russia-Ukraine conflict remains unresolved, with recent Ukrainian strikes hitting major Russian infrastructure and ongoing U.S.-mediated peace talks in the background—though the prospects for a meaningful ceasefire are dim. Western and Russian negotiators are reported meeting in Miami, but Putin has stepped up attacks in the east, and worries over a 'Christmas strike' on Kyiv are heightened. [6][7]
In the Middle East, Israel’s 2025 military operations brought the release of hostages and the destruction of parts of Iran-backed terror networks, but the region remains deeply unstable. The Gaza humanitarian situation is still dire, hostage deals have not delivered comprehensive solutions, and Israeli political fragmentation heading into 2026 means the prospects for a lasting peace or major new stabilization initiative remain uncertain. [6][8][9]
Supply chain risks remain prominent, especially as Asian and European holiday slowdowns coincide with ongoing shipping disruptions in the Red Sea and South China Sea, climate-induced irregularities, and episodic factory closures. Businesses reliant on complex cross-border flows are well-advised to accelerate resilience-building measures, partner with values-aligned democracies, and monitor reputational/geopolitical risks in autocratic markets—particularly China and Russia, where executive orders and unpredictable legal enforcement continue to catch foreign multinationals off guard. [2][3][4]
4. Democracy, Ethics, and the Rule of Law: A World in Regression with Glimmers of Hope
Civil and political freedoms declined sharply in 2025. According to global indices, only about 7% of the world's population now lives in countries where basic civic freedoms are reliably protected—a dramatic drop from 14% the previous year. “Gen Z” protest movements, increased activism, and cross-border digital organizing offer some hope that a new generation may fill the void, but they face daunting challenges, from surveillance to disinformation campaigns originating in authoritarian states. Repression continues in places like China, Russia, Iran, North Korea, and other authoritarian actors, with non-alignment and “digital sovereignty” language increasingly weaponized against businesses and advocates of free expression. The U.S. and EU are both tightening enforcement of digital, technology, and trade rules, while scrutinizing the activities of foreign multinationals with exposure to nations that act with little regard for rule of law or human rights. [8][3][6][10]
Conclusions
The end of 2025 offers no shortage of risks but also unprecedented possibilities for imaginative, values-driven international business leadership. Political, economic, and technological “hinge moments” loom as the U.S-China contest, AI revolution, and regional crises enter new phases. Businesses need to double down on scenario planning for abrupt regulatory shifts, macroeconomic volatility, and the reputational and ethical hazards lurking in autocratic or conflict-ridden markets.
As you map your next moves, consider: How prepared is your organization to pivot supply chains, diversify technology partners, and maintain operational continuity amid the specter of kinetic and cyber conflict? Can you credibly assure stakeholders and customers that your operations are not only resilient but also responsibly aligned with free world values and democratic partners? As global democracy falters, will 2026 be the year a new era of ethical leadership reins in state and tech power, or will authoritarian models tighten their grip on the decade ahead?
Further Reading:
Themes around the World:
Forced-labor import enforcement intensifies
CBP enforcement under the Uyghur Forced Labor Prevention Act continues to drive detentions and documentation demands, increasingly affecting complex goods. Companies need deeper tier-n traceability, auditable supplier evidence, and contingency inventory planning to avoid port holds and write-offs.
Kommunale Wärmeplanung steuert Nachfrage
Die kommunale Wärmeplanung entscheidet, wo Wärmenetze ausgebaut werden und wo dezentral (Wärmepumpe/Biomasse) dominiert. Unterschiedliche Planungsstände und Fristen erzeugen stark regionale Nachfrage-Cluster, beeinflussen Standortwahl, Vertriebsnetze, Lagerhaltung sowie Projektpipelines internationaler Wärme- und Infrastrukturinvestoren.
Carbon border adjustment momentum
Australia’s Carbon Leakage Review recommends an import-only border carbon adjustment starting with cement/clinker, potentially extending to ammonia, steel and glass. This would mirror the Safeguard Mechanism and reshape landed costs, supplier selection, and emissions data requirements for importers.
Volatile tariff regime and litigation
U.S. tariffs are shifting via exemptions, court challenges and congressional maneuvering, complicating pricing and customs planning. Forecast U.S. container imports fall 2% in H1 2026, with March down 12% year-on-year amid uncertainty over tariff legality and scope.
Shadow fleet interdictions rising
Western navies are shifting from monitoring to physical interdiction: boardings, detentions and possible seizures of ‘stateless’ or falsely flagged tankers are increasing. Russia is reflagging vessels; ~640 ships are sanctioned. Shipping, port, and insurance risk premiums are rising materially.
Industrial policy reshapes investment
Federal incentives and procurement preferences for semiconductors, EVs, batteries, and critical minerals are accelerating domestic buildouts while tightening local-content expectations. Multinationals may gain subsidies but must manage higher US operating costs, labor constraints, and complex reporting requirements tied to funding.
Suez Canal pricing incentives
Egypt is using flexible toll policies to win back volumes, including a 15% discount for container ships above 130,000 GT. Such incentives can lower Asia–Europe logistics costs, but shippers should model scenario-based routing and insurance premiums given residual security risk.
Capacity constraints and productivity ceiling
Business surveys show utilisation still elevated (around 83%+), signalling tight capacity and lingering cost pressures. Without productivity gains, growth can translate into inflation and wage pressures, affecting project timelines, construction costs, and the reliability of domestic suppliers for global value chains.
Energiepreise, Gasvorräte, Versorgung
Gasspeicher fielen Anfang Februar unter 30%, teures LNG und Transportengpässe erhöhen Preisrisiken. Parallel stützt der Staat Strompreise (rund 30 Mrd. € 2026). Für energieintensive Branchen bleiben Standortkosten, Vertragsstrukturen und Hedging zentral für Investitionen und Produktion.
Fiscal tightening and tax risk
War-related spending pressures and a higher deficit underpin expectations of fiscal consolidation. IMF recommendations include raising VAT and minimum income tax rates and cutting exemptions, implying higher operating costs, price pass-through challenges, and possible shifts in incentives for investment and hiring.
Gas and LNG project constraints
New EU measures include bans on maintenance and services for LNG tankers and icebreakers, tightening pressure on Russian LNG export projects and Arctic logistics. This increases delivery uncertainty, reduces long‑term offtake reliability, and complicates energy‑intensive investments.
Strait of Hormuz security risk
Rising U.S.–Iran tensions and tanker incidents increase the probability of disruption in the Strait of Hormuz. Even without closure, higher war-risk premia, rerouting, and convoying can inflate logistics costs, tighten energy supply, and disrupt just-in-time supply chains regionally.
Industrial overcapacity and price wars
Beijing is attempting to curb destructive competition, including in autos after January sales fell 19.5% y/y. Regulatory moves against below-cost pricing may stabilize margins but can trigger abrupt policy interventions, supplier renegotiations, and compliance investigations for both domestic and JV players.
Expanding sanctions and enforcement
EU’s proposed 20th package broadens restrictions on energy, banks, goods and services, adds 43 shadow-fleet vessels (≈640 total), and targets third‑country facilitators. Heightened secondary‑sanctions exposure raises compliance costs and transaction refusal risk for global firms.
Regulatory and antitrust pressure on tech
Heightened antitrust and platform regulation increases compliance and deal uncertainty for digital firms operating in the U.S., affecting M&A, app store terms, advertising, and data practices. Global companies should anticipate litigation risk, remedy requirements, and operational separations.
USMCA 2026 review renegotiation
Washington and Mexico have opened talks to rewrite USMCA ahead of the July review, targeting tougher rules of origin, critical minerals cooperation, and anti-dumping tools. North American manufacturers should prepare for compliance redesign, sourcing shifts, and border-process bottlenecks.
Sanctions enforcement and shadow fleet
Washington is intensifying sanctions implementation, including congressional moves targeting Russia’s shadow tanker network and broader enforcement on Iran/Russia-linked actors. Shipping, trading, and financial firms face higher screening expectations, voyage-risk analytics needs, and potential secondary sanctions exposure.
Energy export logistics bottlenecks
Longer voyages, tankers idling offshore, and ice conditions around Baltic ports are delaying loadings and reducing throughput, while ports face stricter ice-class and escort rules. Combined with sanctions-driven rerouting, this increases freight rates, demurrage disputes, and delivery uncertainty for energy and commodities.
Fiscal instability and shutdown risk
A recent partial US government shutdown underscores recurring budget brinkmanship. Delays to agencies and data releases can disrupt procurement, licensing, and regulatory timelines, affecting contractors, trade facilitation, and planning for firms reliant on federal approvals or spending.
EU market access competitiveness squeeze
EU remains Pakistan’s largest high-value export market via GSP+ through 2027, but India’s EU trade deal erodes Pakistan’s tariff advantage. Textiles—about three‑quarters of EU imports from Pakistan—face tighter price and compliance pressure, threatening margins and investment plans.
Nickel quotas tighten supply chains
Jakarta is cutting nickel ore production quotas (RKAB), including a steep reduction at Weda Bay Nickel, aiming to lift prices. Smelters may face ore shortages, raising import dependence (notably Philippines) and increasing volatility for EV-battery and stainless-steel supply chains.
Tech export controls enforcement surge
Washington is tightening and actively enforcing semiconductor and AI-related export controls, illustrated by a $252m settlement over alleged post-Entity-List tool exports to China’s SMIC. Multinationals face higher compliance costs, licensing delays, and heightened penalties for third‑party diversion.
Natural gas expansion, export pathways
Offshore gas output remains a strategic stabilizer; new long-term contracts and export infrastructure (including links to Egypt) advance regional energy trade. For industry, this supports power reliability and petrochemicals, but geopolitical interruptions and regulatory directives can still trigger temporary shutdowns.
Red Sea–Suez shipping volatility
Red Sea security disruptions continue to reroute vessels, weakening Suez Canal throughput and foreign-currency inflows. While recent data show partial recovery (FY2025/26 H1 revenues +18.5%), insurers, transit times, and freight rates remain unstable, affecting Egypt-linked logistics and pricing.
Black Sea conflict logistics risk
Ongoing Russia–Ukraine war sustains elevated Black Sea war‑risk premia, periodic port disruption, and vessel damage reports. Businesses face higher insurance, longer routes, unpredictable inspection or strike risk, and tougher contingency planning for regional supply chains.
Critical minerals investment acceleration
Canberra is fast-tracking critical minerals mining and midstream processing to diversify non-China supply chains. The new prospectus highlights 49 mines and 29 processing projects, backed by a A$1.2bn strategic reserve and a A$4bn facility, reshaping sourcing and JV decisions.
Defense-led industrial upswing
Industrial orders surged 7.8% m/m in Dec 2025 (13% y/y), heavily driven by public procurement and rearmament. Defense spending targets ~€108.2bn and weapons-related orders reportedly exceed pre-2022 averages by 20x. Opportunities rise, compliance burdens increase.
Escalating sanctions and enforcement
The EU’s proposed 20th package broadens energy, banking and trade controls, including ~€900m of additional bans and 20 more regional banks. Companies face heightened secondary-sanctions exposure, stricter compliance screening, and greater uncertainty around counterparties and contract enforceability.
US tariff uncertainty and exports
Thailand’s 2025 exports rose 12.9% (Dec +16.8%), but 2026 momentum may slow amid US tariff uncertainty (reported 19% rate) and scrutiny of transshipment via Thailand. Firms should stress-test pricing, origin compliance, and buyer commitments.
Mortgage stress and domestic demand
CMHC flags rising mortgage stress in Toronto and Vancouver; over 1.5M households have renewed at higher rates and another ~1M face renewal soon. A consumer slowdown could weaken retail, construction, and SME credit demand, while increasing counterparty and portfolio risk.
Energy security and transition investment
Rapid growth targets are forcing revisions to energy planning and grid investments. New frameworks—such as a two-part tariff for battery energy storage (effective Jan 2026)—aim to attract private capital, reduce curtailment, and improve reliability, affecting industrial uptime and PPA economics.
Reciprocal tariff regime expansion
Executive-order “reciprocal” tariffs are being used as a standing leverage tool, illustrated by the U.S.–India framework moving to an 18% reciprocal rate and conditional removals. Firms face volatile landed costs, origin rules scrutiny, and partner-specific dealmaking risk.
New trade deals and friend-shoring
US is using reciprocal trade agreements to rewire supply chains toward strategic partners. The US–Taiwan deal caps many tariffs at 15%, links chip treatment to US investment, and includes large procurement and investment pledges, influencing regional manufacturing footprints and sourcing decisions.
Frozen assets, litigation, retaliation risk
Debate over using immobilized Russian sovereign assets to back Ukraine financing is intensifying, alongside Russia’s lawsuits against Euroclear seeking about $232bn. Businesses face heightened expropriation/retaliation risk, asset freezes, and legal uncertainty for custodial holdings, claims, and arbitration enforceability.
Maritime and insurance risk premia
Geopolitical volatility continues to reshape Asia–Europe logistics. Even as Red Sea routes partially normalize, rate swings and capacity overhang drive volatile freight pricing. China exporters and importers should plan for sudden rerouting, longer lead times, and higher war-risk insurance.
Data localization and cross-border transfers
Data security and personal information rules constrain cross-border data transfers, affecting cloud architectures, HR systems, and analytics. Multinationals may need China-specific data stacks, security assessments, and contractual controls, increasing IT spend while limiting global visibility and centralized operations.