What’s The Best Advice For Building A Career In Emerging Markets During The Trump Era?

Donald Trump’s presidency poses a unique set of risks for students and college graduates interested in building careers in emerging markets. His rhetorical attacks on Mexico and China and military actions against Syria and Afghanistan have rattled some investors and introduced a new level of uncertainty into US politics. Small business owners and consumers remain optimistic about the prospects for economic growth during the Donald Trump presidency. But, students and recent graduates who are interested in building careers in emerging markets face new questions about trends in investment, trade, and globalized manufacturing. To get a sense of what college graduates with an interest in emerging markets can expect during the Trump era, I reached out to Robert Abad, a graduate of Columbia’s School of International and Public Affairs (SIPA) who runs EM+BRACE, a boutique emerging markets advisory firm.

Nathaniel Parish Flannery: President Trump has certainly taken a new course in terms of discourse and style of diplomacy. But in real terms how much of an impact is Trump having on the world of emerging market investing?

Robert Abad: Looking at the performance of Emerging Markets or “EM” equity, fixed income and currency markets over the past 12 months, it might be easy to conclude that Trump has hardly made an impact. The truth is: it’s just too early to know what the real impact will be.

First, Trump’s unpredictable and increasingly irrational rhetoric on global affairs has shattered conventional wisdom of present-day international relations and muddied our ability to analyze global risk. It’s engendered doubt about the integrity of diplomatic alliances, the viability of security agreements, and the future role of multilateral arrangements in helping to preserve the world order and its commons. More worrying for EM, it’s cast a pall over the US’ leadership role in championing free trade, market integration and democracy – factors that, in aggregate, have been essential drivers of global progress.

Second, Trump’s inflammatory rants about Mexico and China throughout the US presidential campaign were more than enough to rattle EM sentiment. However, Trump’s recent military incursions in Syria and Afghanistan, and his barbs at North Korea have instilled a creeping sense of fear that, in a moment of self-interest, self-promotion, or self-preservation, he may inadvertently erase a century’s worth of hard-fought global progress or, worse, plunge the US into a costly and protracted global conflict.

Such fears, quite frankly, cannot and should not be taken lightly. The literature on global conflict highlights “fear of loss of prestige” and “political misjudgment” as two principal causes of war. With economic tension and populism at a fever pitch across the world, and the US, Russia and China jostling to secure their spheres of influence, a simple provocation by one party or an ally could set off a chain of unexpected events.

With this in mind, it’s worth asking how global markets, including EM, might fare in a scenario of major global conflict – one that has a debilitating impact on financial markets, supply chains, and immigration – for example, the manner in which the First World War disrupted the first wave of globalization in the modern era. The knee-jerk reaction might be to write-off EM in such a grim scenario. However, the reality is that the emerging world has always played an integral part in reanimating the global economy during and after periods of major disruption, via its core strengths: labor and natural resources. There should be no reason to expect a different EM dynamic going forward.