Emerging Markets Insights: Trade, tariffs and peace

As we approach 2026, global investment landscapes are poised for significant shifts, with policy changes and geopolitical developments at the forefront. The potential rollback of US tariffs could rejuvenate emerging markets, particularly those previously disadvantaged by trade tensions. Meanwhile, a forthcoming US-India trade deal may bolster bilateral economic relations and foster growth in both nations’ export sectors. Additionally, optimism surrounds a possible peace agreement between Russia and Ukraine; such a development could alleviate pressure on commodity prices and ease inflationary concerns in developed markets.

In China, the government's anti-involution initiative aims to streamline industries by encouraging innovation over competition-driven price wars. This policy supports the emergence of financially robust leaders capable of advancing China's high-tech aspirations while providing intriguing opportunities for investors focused on industry champions. However, risks persist as China's pivotal role in global supply chains means that any missteps could have widespread ramifications.

Emerging market equities faced challenges recently due to uncertainties about US interest rates and valuation pressures on AI-related stocks. Despite these headwinds, India's positive trajectory continues amid cooling inflation and progress toward enhanced trade ties with the United States. In contrast, regions like emerging Europe grappled with weaker oil prices impacting investor sentiment; however Latin America saw gains thanks to more favorable inflation figures paving the way for potential monetary easing.