Hence, even if a specific emerging country is not directly exposed to higher tariffs, or if it is not in the region where a geopolitical issue is flaring up, it can experience capital outflows as investors will require a higher premium on its assets. Page 5 of 10  There are more direct channels through which emerging markets can be affected by geopolitical issues.
These include, of course, upward pressure in oil prices. We saw, up to a few weeks ago, that tensions in the Persian Gulf were keeping the price of crude elevated, even as global growth showed signs of slowing. In addition, business confidence will typically suffer if the geopolitical tension affects prospects for trade with the region concerned.