Impact of Trump’s tariff policy on the information technology sector: analysis of global market reactions

Purpose This study aims to examine the market reaction of information technology firms to Trump’s tariff postponement announcement on April 9, 2025, and to identify the factors that influenced these responses. Design/methodology/approach The authors use an event study methodology to analyze the market reaction of 1,336 global information technology firms across 41 countries to President Trump’s tariff postponement announcement. Cross-sectional regressions are further conducted to examine how firm-level characteristics and tariff exposure influence cumulative abnormal returns. Findings The results show that Trump’s tariff policy triggered adverse market reactions before the postponement, particularly in the information technology sector due to rising costs and supply chain risks. Emerging and frontier markets suffered sharper declines than developed markets, while small capitalization and high-growth firms were most exposed. Fintech and Semiconductors were the most vulnerable subsectors. Cross-sectional regressions confirm that firms with high U.S. export exposure faced stronger negative reactions. However, the postponement eased policy uncertainty, restored investor confidence and drove a rebound in stock prices. Originality/value To the best of the authors’ knowledge, this study is the first to examine how tariff postponements, rather than direct tariff impositions, shape market reactions, showing that postponements mitigated negative responses by reducing policy uncertainty and restoring investor confidence in the information technology sector.