The intensifying trade war between the US and China has struck fear into emerging market investors and triggered a wave of outflows from EM equities and bonds. But analysts warn that it could be just a taster of what is to come.

Foreign money has left EM assets at a rate of more than $5bn a week since US president Donald Trump toughened his line against Chinese imports on May 6, according to the Institute of International Finance, which tracks cross-border capital flows. However, even after these recent outflows, foreign investors have accumulated net positions in EM assets of more than $30bn for the year to date, according to the IIF. Many investors appear to be staying put in the belief that the dispute will be over before long.

“The whole market can turn on a tweet,” said Bhanu Baweja, a strategist at UBS. “People are naively hoping that Trump will fold in front of China very soon. But it seems more serious.”