When the world’s two largest economies slap tariffs and other trade restraints on each other, the dislocations inevitably spill over into other nations’ economies and financial markets. And there will be some winners.
Fuss notes the Thai baht is stronger against the U.S. dollar this year. The beneficiaries of that are Mexico and Canada, which are gaining business from “near-shoring,” and also some Asian nations like Myanmar.
Fuss also thinks high-cost Asian economies like Japan and Singapore could lose business. Other global investors like Mark Mobius see India as a major beneficiary.
Some nations like Australia and New Zealand, where Fuss has invested for decades, find themselves caught in the middle. Their cultures and histories are tied to the West, but Asia, particularly China, represent their market of the future. Indeed, China’s explosive growth is the major reason Australia hasn’t suffered a recession in nearly three decades.
One major player in the global economy, the Fed, has been virtually silent about the trade war. But Fuss believes the U.S. central bank is watching the developments like a hawk.
“The bottom line is the Fed will be extra cautious,” he says. “Hopefully, there will be a recovery in our economy.”
Nothing would be more desirable than a resolution both parties can live with. That probably would require concessions on both sides about intellectual property issues, with an acknowledgement that neither side is going to agree on every aspect of technology law.
"If we can find a way to work this out, Asia would become a wonderful place to invest," Fuss continues. "There are still lots of things we agree upon. Both sides want better living conditions and education for their people."
But Fuss acknowledges that’s a hope, not a prediction. Both nations possess a lot of power and neither appears willing to blink first.