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The impact of US reciprocal tariff announcements on global stock markets: an event study analysis

Rahul Kumar & Faten Moussa

International Journal of Accounting, Business and Finance2025https://doi.org/10.55429/ijabf.v4i1.205article
ABDC C
Weight
0.50

What the paper says

This study examines the impact of the April 2025 US reciprocal tariff announcement on the stock markets of 47 countries using an event study methodology. Analyzing daily index returns across multiple event windows, we find significant negative cumulative abnormal returns (CAAR = -1.43%, p<0.01) over the [-7,+10] window, with the strongest reactions occurring within three days post-announcement. Affected countries experienced more severe declines (CAAR = -2.40%) than unaffected nations, while developed markets (-3.55%) showed greater vulnerability than emerging markets. Robustness tests confirm these findings across alternative methodologies. The results demonstrate that reciprocal tariffs, which explicitly incorporate retaliation mechanisms, generate stronger market reactions than unilateral measures, with implications for investors, policymakers, and multinational corporations navigating trade policy uncertainty.

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https://doi.org/https://doi.org/10.55429/ijabf.v4i1.205

Or copy a formatted citation

@article{rahul2025,
  title        = {{The impact of US reciprocal tariff announcements on global stock markets: an event study analysis}},
  author       = {Rahul Kumar & Faten Moussa},
  journal      = {International Journal of Accounting, Business and Finance},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.55429/ijabf.v4i1.205},
}

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The impact of US reciprocal tariff announcements on global stock markets: an event study analysis

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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