Investment trust insider on the Trump-effect on emerging markets – James Carthew: A Trump win won’t thump all emerging markets
If Donald Trump is re-elected as US president it is likely to be unhelpful for emerging markets, but countries, businesses and fund managers will navigate the inevitable gyrations.
Recent events have increased expectations of a new Trump presidency. The ramifications of this are widespread (and fairly depressing) but one aspect that I thought is the potential impact on emerging markets trusts.
Biden already has a pretty robust stance on relations with China. He has made it clear that its sabre-rattling in the South China Sea will not be tolerated and restated his support for Taiwan.
By contrast, Trump has declared that Taiwan should compensate the US for the protection it provides. Last week, after surviving an assassination attempt, he wove this into an argument that Taiwan has taken almost all of the US’s semiconductor industry. It was not all good news for China, though, as he has also threatened to impose sizable tariffs on Chinese imports.
On Mexico, Trump has suggested sending in US troops to battle drug gangs – whether the Mexican government gives permission for that or not. More widely, Trump’s protectionist instincts would likely weigh on Latin American exporters.
In Eastern Europe, as support for Ukraine wavers under a Trump-Vance ticket, nervous investors may avoid its near neighbours, many of which may be next on Putin’s hit list.
In the Gulf, family interests, which include a new Trump tower being built in Jeddah and a hotel in Oman, may mean… read more here