His electoral victory Donald Trump sent US stocks to new records and pushed the dollar to a two-year high. However, this news is far from good for the rest of the world, according to an analysis by the Bloomberg agency.

The index of emerging-market currencies has fallen more than 1 percent since the U.S. election, on course to erase this year’s gains. European shares and the euro have also recorded losses.

The stark divide between U.S. and non-U.S. assets has grown sharper as Trump’s Cabinet begins to take shape, with stalwarts ready to implement the proposals of the “America First” agenda appointed to key positions. That has confirmed investors’ worst fears: that the push for higher tariffs, particularly in China, will gather momentum, along with a series of potentially disruptive policies that can push inflation higher and tie the hands of central banks. banks.

These concerns have prompted investors to put their money into US assets. Fund managers’ exposure to U.S. stocks rose to the highest level since 2013, according to Bank of America research. On the other hand, emerging markets such as China and Mexico, often seen as the most vulnerable to Trump’s trade policies, have been hit.

Trump’s more domestically focused policies will favor American companies, said Rajeev De Mello, chief investment officer at Gama Asset Management SA.

Investors are closely watching cabinet appointments for signs of whether Trump’s campaign rhetoric will translate into policy. The president-elect had previously pledged to impose massive new tariffs, considering tariffs of 20 percent on all foreign goods and 60 percent or higher on those from China. That has reignited fears of another trade war that could disrupt global supply chains and hurt companies that depend heavily on US sales.

Trump’s other proposals include mass deportations and tax cuts, which could lead to higher inflation and limit the Fed’s room to cut interest rates.

As these prospects support the dollar and pressure emerging market currencies, some central banks, including Indonesia’s central bank and Brazil’s central bank, intervened in markets last week to support their currencies.

That’s not to say there aren’t safer options.

Money managers like Pictet Asset Management are boosting their investments in markets like India that are seen as less affected by Trump’s policies. Tariffs on Chinese goods may also prompt investment to shift from the world’s second-largest economy to Southeast Asia, according to Kasikorn Asset Management.

But for now, US assets appear to be clearly the most profitable.