Financial market reactions to U.S. tariff announcements: Evidence from trade-surplus and trade-deficit countries
Bibliographic record
Abstract
• Analyzes financial market reactions to the 2025 U.S. tariff announcement. • Uses event study to compare trade-surplus and trade-deficit country responses. • Trade-deficit nations showed muted or mixed equity market reactions. • Trade-surplus nations saw positive market responses, showing trade shifts. • Findings highlight the role of policy uncertainty in global financial markets. This study examines the financial market response to the U.S. tariff announcement on February 1, 2025, which imposed a 25 % tariff on imports from Mexico and Canada (except energy products at 10 %) and a 10 % tariff on China. The results reveal asymmetric market reactions: trade-deficit countries, which faced direct tariff impositions, exhibited muted and mixed responses, suggesting that investors had already priced in potential trade frictions or expected policy reversals. In contrast, trade-surplus countries experienced significant positive CAARs, reflecting investor optimism about potential trade reallocation benefits.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.001 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.001 | 0.000 |
| Research integrity | 0.000 | 0.001 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".