Trade wars are back on the radar after US President Donald Trump unveiled the import tariffs on steel and aluminum. How sensitive are emerging market (EM) economies to such trade disruptions with the US? The total effects of lost income from reduced exports to the US are tricky to quantify – for instance, affected countries are likely to import less from elsewhere. But one way to estimate the initial impact is by looking at direct trade links.
In relative terms, while these actions are likely to weigh on sentiment significantly, we don’t believe the effect will be that large in absolute trade terms. READ MORE
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