Donald Trump’s long anticipated tariff offensive was finally revealed yesterday on what he refers to as ‘Liberation Day’. We have mapped out the new tariffs impacting the EM countries where MCP is currently invested.
So far, these new tariffs have not significantly changed our outlook as the overall exposure of our holdings that export directly to the US in the affected sectors is limited. Notably, Trump has exempted certain sectors, such as semiconductors, where we maintain an overweight position. Likewise, our overweight exposure to the services sector, shielded from tariffs, adds to the resilience of our portfolio against these measures.
That said, we continue to remain cautious and watch the evolving situation closely, particularly any of Trump’s upcoming meeting with global leaders that could set a precedent for tariff negotiations. At the same time, we are monitoring potential indirect effects, such as an economic slowdown, shifts in global demand and supply chains or prolonged uncertainty in certain key sectors globally.
Our recent trips and direct engagement with portfolio companies in Taiwan, South Korea, and India further reinforce our confidence that the portfolio is well-positioned for the coming months.
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