Asia may need to brace itself for a prolonged trade war threat

A CONFLUENCE of potent factors - chiefly brewing trade hostilities between the world's biggest economies, a slowing China and tighter financial conditions amid the unwinding of global quantitative easing - is giving emerging markets a torrid time.

The volatility is set to persist as trade friction escalates between Washington and its trading partners. The markets are riddled with trepidation after US President Donald Trump doubled down again on his tariff threat on more Chinese goods; Beijing has vowed to retaliate if the US imposes new tariffs.

At the heart of investors' concerns is this - higher tariffs will hurt exports, investments, consumption and economic activity and, by extension, global growth. Navigating this risk amid a normalisation of monetary policy makes it even more dicey.