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."