Emerging Markets Should Eye Opportunities Amid Trade Frictions, Says Senior Economist

US President Donald Trump’s tariffs are much more targeted than people think, according to Trihn Nguyen, senior economist at Natixis, highlighting the nuanced impact of recent US trade policies on global markets.

Nguyen, in a recent post on X, emphasised the importance of adapting to the evolving global supply chains. “Countries should focus on how to gain from shifting global supply chains from trade-war and thereof.” While some countries are seizing these opportunities, others are lagging behind, she pointed out.

“What is very clear is there is higher friction to trade with China, which is 10% and that already on top of pretty high tariffs and given the role of China in global manufacturing…there is a fracturing of global supply chain, there is great destruction, with great destruction there is great opportunity,” Nguyen told NDTV Profit.

Not every country in Southeast Asia or emerging Asia is capitalising on these opportunities, she said. “A good example is Indonesia. It sees mining as a bigger opportunity than manufacturing itself. As a result, there is not significant incentive" she said.

"A country that is much more aggressive is Vietnam and to an extent India with ‘Make in India’ and PLI."

India’s strategic focus has traditionally been on protecting itself from a flood of imports. However, Nguyen sees a significant opportunity for India to diversify its exports and achieve more aggressive growth. India is a very attractive market, despite the current cyclical slowdown and growing imports, she said.

Nguyen also highlighted several key points regarding India’s economic landscape. The cyclical slowdown in India is a significant uncertainty. Additionally, market cap to GDP and valuations in India remain a point of concern, she said.

The government needs to ensure that the short-term slowdown remains a blip and doesn’t build up. There will likely be more rate cuts in India, and the RBI is expected to continue supporting liquidity conditions. Furthermore, India needs to expand to more sectors to sustain its growth, Nguyen said.