An unpredictable America looks more and more like an emerging market

Stock markets are roaring, but political volatility and social tensions make some investors see the US as a risk to be hedged against.

- Rana Foroohar

Last week, as the United Nations General Assembly met in New York, I moderated an event with a group of well-known economists and foreign affairs experts on the effects of the US election on the future of multilateralism.

Everyone agreed that Donald Trump would be a disaster for global cooperation, and that Ms Kamala Harris was a bit of an unknown quantity.

The most interesting takeaway, however, was that participants were less interested in how America would engage with the world than where the world would go with or without the US.

While it sometimes seems that policymakers and business leaders are breathlessly waiting, plans on hold, to see what happens in November, it's perhaps truer to say that they are making peace with a world in which the US is not an anchor for stability, but rather a risk to be hedged against.

It is as if, over the past few years, America has become one giant emerging market (EM) - full of peril and promise but most of all unpredictability. Political leaders overseas know policies may change radically every four years.

Chief executives understand that the subsidies and tax breaks offered today may disappear tomorrow. Investors are considering the premium that should go along with rising debt and more volatile politics.

Indeed, many governments and businesses are, as Pi Capital put it in a recent briefing, "quietly trying to decouple themselves from reliance on the US".