Capital Ideas Podcast How emerging markets could win the trade war
Jun 12, 2025
Lisa Thompson, a seasoned Capital Group portfolio manager with 37 years in international markets, shares insights on how emerging markets can thrive amid U.S.-China trade tensions. She discusses the potential for these markets to gain from rebalancing global trade and the importance of currency stabilization. Challenges and adaptability in emerging markets like China and Mexico are explored. Thompson predicts a new wave of companies leading the market, emphasizing strategic investment opportunities arising from shifting global capital.
AI Snips
Chapters
Transcript
Episode notes
Trade War's Global Impact
- The U.S. aims to rebalance global trade via tariffs, causing uncertainty but some needed correction of imbalances.
- This shift challenges old global trade norms and affects consumer prices and manufacturing worldwide.
Emerging Markets' Trade War Opportunity
- Some emerging markets may benefit from a weaker dollar and increased investment competition from China and the U.S.
- Despite harsh rhetoric, a worst-case trade war outcome is unlikely as global interdependence remains strong.
Mexico's Role in Rebalancing Trade
- Mexico remains closely linked to U.S. manufacturing and stands to benefit from reshoring and reglobalization.
- Labor costs and geographic proximity make Mexico a natural trade and manufacturing partner for the U.S.