Emerging Markets Position Themselves as Winners in US-China Trade War Fallout
As the US-China trade war enters its eighth year, emerging markets are quietly capitalizing on the economic rift, positioning themselves as the next global manufacturing hubs. Countries like Vietnam, India, and Mexico have seen foreign direct investment (FDI) surge by 30-45% in 2024 alone, according to World Bank data, as multinational corporations diversify supply chains away from China.
Key Developments:
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Vietnam’s Boom: Electronics exports grew 28% year-over-year, with Apple shifting 18% of iPhone production to Hanoi.
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India’s Rise: Semiconductor investments hit $8.7 billion after TSMC and Intel committed to new fabs in Gujarat.
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Mexico’s Advantage: Automotive exports to the US surpassed China’s for the first time, aided by USMCA tariffs.
Expert Insight:
The great supply chain shift has disproportionately benefited emerging markets,” states HSBC’s Frederic Neumann. “They provide what corporations now crave most: lower operating expenses, reduced geopolitical risk, and unimpeded routes to Western consumers.
Long-Term Risks:
Overheating economies and infrastructure gaps could test this growth. While Vietnam wrestles with electricity shortfalls, Mexican manufacturing zones face crippling transportation logjams.
