IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v77y2025ipbs0275531925001813.html
   My bibliography  Save this article

Tariff exposure and sectoral vulnerability: Evidence from equity market responses to the 2025 U.S. trade shock

Author

Listed:
  • Kaczmarek, Tomasz
  • Demir, Ender
  • Rouatbi, Wael
  • Zaremba, Adam

Abstract

We analyze global stock market reactions to the U.S. tariff announcement of April 2, 2025, using daily returns across 11 major industries in 67 countries. Equity prices fell sharply, particularly in energy, basic materials, and technology. The cross-country variation reflects three main drivers: tariff exposure, technological competitiveness, and sector-specific valuation profiles. Countries with larger, wealthier, and more innovation-oriented markets experienced steeper losses, suggesting that investors viewed them as a greater competitive threat to U.S. producers. Within sectors, investors favored firms perceived as safer. Structural vulnerabilities, rather than direct trade exposure, were the primary drivers of market reactions.

Suggested Citation

  • Kaczmarek, Tomasz & Demir, Ender & Rouatbi, Wael & Zaremba, Adam, 2025. "Tariff exposure and sectoral vulnerability: Evidence from equity market responses to the 2025 U.S. trade shock," Research in International Business and Finance, Elsevier, vol. 77(PB).
    • Handle: RePEc:eee:riibaf:v:77:y:2025:i:pb:s0275531925001813
    DOI: 10.1016/j.ribaf.2025.102925
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531925001813
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2025.102925?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Tariffs; Trade policy; International stock markets; Protectionism; Event study; Market reaction; International finance;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:77:y:2025:i:pb:s0275531925001813. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.