Friend or Foe – could this be the defining question for EM sovereigns in 2026?

RBC BlueBay strategists outline why EM sovereign performance in 2026 may hinge on countries’ alignment (or non-alignment) with the Trump administration amid rising geopolitical fragmentation.

• Geopolitical risk is a key differentiator: the US “large-scale strike” in Venezuela underscores escalation and sanctions-tail risks across EM.

• Latin America shows policy consequences: Colombia briefly faced 25% tariffs, while Brazil was hit with 50% tariffs, highlighting headline-driven volatility.

• Asia and CEEMEA are increasingly transactional, with trade deals, defence links and funding flows shaping idiosyncratic sovereign outcomes.

Explore the full report for country-by-country flashpoints, scenario drivers and positioning implications.