The extremely high US import tariffs imposed on China will likely strengthen the forces that have driven multinational corporates to shift production for the US market away from China and towards other EMs in recent years. Those EMs with spare capacity in their manufacturing sector are likely to gain US market share from China in the near term. But until some of the uncertainty about future tariff rates clears, many large long-term investment decisions about building new capacity in EMs are likely to be on pause.
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