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Tariff exposure and liberation day reactions: Initial evidence from corporate filings

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  • Hu, Wenyao
  • Wang, Heng Emily
  • Han, Yue

Abstract

This study develops a text-based measure of firm-level tariff exposure using the sections on business operations and risk factors in corporate fillings from 2024. Firms with higher tariff exposure experience significantly lower abnormal returns around the April 2, 2025 “Liberation Day” tariff announcement in the short term. Subgroup analyses show that the effect is most pronounced among firms with high leverage, strong growth and valuations, high advertising intensity, and low earnings quality. Collectively, disclosure-based tariff exposure emerges as a priced forward-looking risk, providing implications for mandated risk language disclosure, policy uncertainty, and risk channels in asset pricing.

Suggested Citation

  • Hu, Wenyao & Wang, Heng Emily & Han, Yue, 2026. "Tariff exposure and liberation day reactions: Initial evidence from corporate filings," Economics Letters, Elsevier, vol. 259(C).
    • Handle: RePEc:eee:ecolet:v:259:y:2026:i:c:s016517652500624x
    DOI: 10.1016/j.econlet.2025.112787

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    Keywords

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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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