The greatest concern is Trump's “saber-rattling on trade,” with China especially subject to “a political miscalculation,” says Roth. The U.S.-China relationship is “more apt to suffer from some form of executive or other type of misstep,” he said. China buys 8 percent of U.S. exports; Mexico, another relationship on the ropes, buys 18 percent.
Trade policy is a key risk, said Clement K. Miller, a portfolio manager for Wilmington, who sees growth opportunities in emerging markets. The U.S. sells more than $150 billion in exports to other countries, the largest single buyer being Canada at 18 percent.
Miller said he is optomistic about EM investment opportunities. The purchasing power of the middle-class has proven sustainable—especially in Asian nations such as China and India, he noted. “China is the poster child for current emerging markets as the largest single source of imports for U.S. consumers in 2015. Threatened tariffs on China would hike prices and threaten consumer spending,” Miller said.
As for Mexico, “Feared retaliations, should Trump set up a U.S. vs trading partners Mexico and China, could result where two players align against the third.”
Wilmington's report also said “rising interest rates will be good for the whole economy.”