Share price reactions to tariff imposition announcements during the first Trump administration

Sascha Tobias Wengerek, André Uhde and Benjamin Hippert

Finance Research Letters, 2025, vol. 80, issue C

Abstract: This study analyzes the impact of tariff imposition announcements on the stock prices of 1,194 U.S. companies during the first Trump administration, using a unique sample of 4,624 announcements made by or against the U.S. between January 2018 and August 2019. We find that tariff announcements lead to negative (cumulative) average abnormal stock returns. These negative wealth effects occur regardless of whether the Trump administration imposes safeguard tariffs to protect domestic industries or foreign countries announce retaliatory tariffs. Moreover, the adverse impact is primarily driven by announcements involving China, with variations linked to sector-specific, tariff, trade, and firm characteristics.

Keywords: Geopolitical risk; Protectionism; Strategic trade policy; Tariffs; Trade conflict; U.S. – China trade war (search for similar items in EconPapers)
JEL-codes: F14 F18 F23 F51 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:80:y:2025:i:c:s1544612325006415

DOI: 10.1016/j.frl.2025.107381

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