Investors who are adjusting their strategies as the US trade war intensifies have the option to identify tactical country-specific opportunities to navigate shifting global supply chains.
Dina Ting, head of global index portfolio management at Franklin Templeton ETFs, said the impact on emerging markets showed a need for diversification amid trade uncertainty.
With semiconductor chips exempt from new tariffs, Taiwan remains a dominant player in the global chip market, while select economies like Brazil and Mexico are finding ways to minimise damage.
Winners and losers in the trade war
Washington has imposed sweeping tariffs on all imported goods, with China hit hardest. Total levies on Chinese products are now reaching 54%. The European Union and several Asian economies also face disruption. Investors are responding by seeking out nations that can better withstand tariff pressure, says Ting.
Among those seeing limited direct impact are Canada and Mexico, which secured some exemptions for USMCA-compliant goods, particularly minerals, says Ting. Mexico’s president Claudia Sheinbaum has signaled a strategic response rather than immediate retaliation. Brazil, bolstered by strong exports of soybeans and cotton, is another key player benefiting from a realignment in global trade flows.
Taiwan’s semiconductor shield
Despite new 32% US tariffs on its goods, Taiwan’s semiconductors remain untouched. Holding two-thirds of the global foundry market and over 90% of advanced chip production, Taiwan remains a tech powerhouse. The MSCI Taiwan Index has dipped nearly 9%, reflecting broader market uncertainty rather than fundamental weakness.
Ting notes that with AI demand surging, Taiwan’s 3.3% GDP growth forecast for 2025 remains ahead of the G-7 average. As supply chains shift, investors are targeting nations and industries positioned to weather the storm—with Taiwan’s semiconductor sector and Brazil’s agricultural exports among the key opportunities.
European stocks decline amid but opportunities remain
The US tariff decision has deepened uncertainty in European markets, pushing already undervalued stocks even lower. Martin Frandsen, portfolio manager at Principal Asset Management, notes that while tariffs and trade disruptions justify the market’s reaction, long-term opportunities remain.
“Certain stocks now appear highly attractive, as markets have priced in an overly negative outlook,” Frandsen said. Europe’s push for increased investments in infrastructure, defence, and innovation could provide a buffer against economic headwinds, creating growth potential for select sectors.
Companies tied to digital and physical infrastructure, as well as leading European technology firms, may benefit from accelerated investment and policy support. While uncertainty prevails, strategic investors could find value in areas poised for long-term growth despite short-term volatility.
China will not back down
In the ongoing volatility in markets, China is making it clear to Washington that it is fully prepared for an extended trade war and will not back down. Nigel Green, CEO of deVere Group, warns that Beijing’s latest moves signal a government bracing for prolonged economic conflict with the US under President Trump.
A key indicator is the yuan’s quiet depreciation—a strategic warning that China can use currency devaluation as a countermeasure. “The weakening yuan is not just market forces at play,” says Green.
“It’s Beijing putting Washington on notice that stronger measures are in reserve if escalation continues.”
While the US imposes tariffs and restrictions, China is fortifying its economy—diversifying supply chains and preparing for a long-term standoff. Green emphasises that China is not acting recklessly but methodically, signaling that any further US escalation will have serious consequences.
Markets are already on high alert, adjusting to the possibility of long-term global trade shifts. “Beijing is setting the terms of engagement,” Green says. “China is no longer trying to avoid a trade war—it is preparing to win one if necessary.”
