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

Author

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  • Wengerek, Sascha Tobias
  • Uhde, André
  • Hippert, Benjamin

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.

Suggested Citation

  • Wengerek, Sascha Tobias & Uhde, André & Hippert, Benjamin, 2025. "Share price reactions to tariff imposition announcements during the first Trump administration," Finance Research Letters, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:finlet:v:80:y:2025:i:c:s1544612325006415
    DOI: 10.1016/j.frl.2025.107381
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    More about this item

    Keywords

    Geopolitical risk; Protectionism; Strategic trade policy; Tariffs; Trade conflict; U.S. – China trade war;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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