Globalization is good. That was the message from emerging market leaders including the Chinese President Xi Jinping at the World Economic Forum in Davos last week.
But the protectionist rhetoric from the White House since President Donald Trump took office has rattled emerging economies that are dependent on capital from the United States.
"Donald Trump's rhetoric has signaled an emphasis on pro-growth and America-first during his presidency. Although policies such as increased infrastructure spending and tax cuts, should be simulative to the US economy, the trade policies currently being touted may be damaging for global growth, particularly for emerging economies," Alex Dryden, global market strategist at JPMorgan Asset Management, told CNBC via email.
Dryden further explained that Trump's decision to withdraw from the North American Free Trade Agreement (NAFTA) would hurt Mexico, which exports 25 percent of its gross domestic product (GDP) to the U.S.
"Investors are also concerned that the initial withdrawal and renegotiation of trade agreement leads to other countries implement retaliatory tariffs on U.S. goods, resulting in a trade war."
Earlier this week President Trump announced that he would sign an executive order to renegotiate the free trade agreement between the U.S., Canada and Mexico. Eliminating the North American Free Trade Agreement (NAFTA), which was crafted by former President Bill Clinton and enacted in 1994, was a frequent Trump campaign promise.
Trump signed an executive order to withdraw from the Trans Pacific Partnership (TPP), a trade agreement among 11 Pacific Rim countries that has not been ratified by Congress. Trump wants to negotiate individual trade deals with these countries.
Dryden explained that in a wider trade war, where world trade volumes decline, it is South East Asia where the pain will be felt most.
"In the ASEAN region, global trade is the lifeblood of these developing economies, with global exports amounting to 45% of GDP. Countries such as South Korea and Taiwan derive 38 percent and 55 percent of their GDP from exports, respectively, would be particularly hard hit."
Meanwhile, some analysts have said that a Trump presidency may be positive for U.S. growth initially and that is a positive for emerging market economies and their equity markets as long as the dollar is not too strong. However, the protectionist side of his agenda can have negative repercussions for the emerging economies.
Mathieu Negre, head of global emerging market equities at Union Bancaire Privée, told CNBC via email that Trump's first few days in office seem to point to a more protectionist stance.
"If that's the case, there are 4 items that could be significant: the renegotiation of NAFTA, the introduction of a possible border tax, the straight imposition of tariffs and the labelling of China as a currency manipulator."
However, Rathbones' asset allocation strategist Ed Smith says China is not as vulnerable to U.S. protectionism as other emerging markets.
"We've been far less dismissive of President Trump's protectionist rhetoric than Western markets appear to be," Smith said, adding that in his inaugural address, Trump proclaimed that America will follow two simple rules – buy American and hire American.
Smith further explained that other emerging markets are far more vulnerable to American protectionism than China, which has already gone a long way towards reorienting the economy towards more internal drivers.
"The services sector accounts for 52 percent of the economy, and that is highly likely to be an underestimation, given the poor collection of data from the private sector."