The US-China standoff remained a dominant theme in May. However, green shoots emerged as Presidents Trump and Xi agreed to a significant rollback of reciprocal tariffs.  Emerging market equities saw gains over the month, albeit underperforming relative to developed market equities. South Africa and Mexico led within emerging markets while Taiwan, Hong Kong, Indonesia and Korea were notable contributors. The MSCI Emerging Markets Equity Index ended the month 4.3% higher, while the MSCI World experienced a 5.9% uptick.

Global equities came under pressure in April as U.S. President Trump surprised the markets with much larger than expected tariffs against virtually every trading partner in the world. On 2 April, during a ceremony in the White House Rose Garden, he introduced what he called a “reciprocal tariff” strategy, which applies a series of tariffs on all U.S. imports based loosely on each trading partner’s goods trade deficit with the U.S.