The Impact of Trade Policy on Financial Markets. Evidence from the U.S. – China Trade War

Abstract

The objective of this thesis was to assess the impact of the U.S. – China trade war on financial markets. By utilizing event study methodology, research has analyzed the reactions of various financial data to tariffs and trade-related announcements. The results suggest a significant impact of both positive and negative trade-related news on stocks, debt securities and stock market volatility. The study goes into detail on how the reactions differ across different major indices, market sectors, capitalizations and U.S. treasury yields.