Trade representatives from the United States and China met last week in the latest attempt to strike a truce in the ongoing trade war.
The impact of the tariffs is clearly evident, with Chinese exports to the U.S. falling by $43 billion, or 8%, compared to the peak last year on a trailing 12-month basis.
In turn, China’s purchases of American goods have declined by 21%.
Yet while the trade war rages on, a few emerging-market regions are coming out ahead, particularly those participating in China’s Belt and Road Initiative (BRI).
Announced by Chinese President Xi Jinping in 2013, the BRI is the 21st-century version of the ancient Silk Road trading route.
The BRI is projected to result in over $1 trillion in infrastructure spending that will increase China’s economic links to Asia, Africa and Europe.
Since the effort was launched, $270 billion has already been spent to support projects spanning the energy and transportation sectors.
As China expands its ties to countries benefiting from the BRI, it has also sought to further strengthen trade relationships as the conflict with the U.S. continues.
The chart below demonstrates the percent change in exports to China since the start of 2018.
As long as the U.S.-China trade war continues, look to emerging-market nations to surface as the clear winners.
You can take advantage of this trend today with the iShares Core MSCI Emerging Markets ETF (NYSE: IEMG).
This exchange-traded fund (ETF) includes companies in Brazil, China, South Africa and other emerging markets.
My colleague Ted Bauman also just recommended a Chinese stock in the November edition of his Bauman Letter.
Wall Street has temporarily mispriced it because of the trade war. That’s why Ted says it’s about to soar 150% over the next three years.
Click here to learn more about The Bauman Letter and how to profit from the China’s New Silk Road.
Best regards,
Clint Lee
Research Analyst, Alpha Stock Alert
