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EM trade patterns after two years of Trump

The Emerging View

03 March 2020

This report is an update of a 2017 report on intra-EM trade patterns. The 2017 report relied on data up to 2016. This report adds two more years of data and therefore covers the first two years of the administration of United States (US) President Donald Trump. This period was characterised by growing US protectionist rhetoric, which soon morphed into the US withdrawal from the Trans-Pacific Partnership, the dissolution of NAFTA and, by mid-2018, the start of the US trade war with China.

The data shows that Trump’s protectionism has generally been positive for trade patterns in Emerging Markets (EM). Intra-EM trade has expanded at a sizzling pace of 33% in just two years. There is also evidence that some EM regions, notably Emerging Europe and Latin America, have benefitted from diversion of US-China trade.

The continuing past pace of growth in intra-EM trade and more diverse trade should be viewed very positively by investors. After all, the linkages between international trade and long-term economic prosperity are well-established in both theory and empirical fact.   


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