Trump Tariff: What stock markets reaction in Southeast Asia

Abstract

Abstract – Donald Trump's tariff policies have had a disproportionate impact on ASEAN economies, disrupting exports, deterring investment, and weighing on US-ASEAN trade relations. To address these challenges, ASEAN countries are exploring diversification, regional integration, and domestic reforms to increase resilience and reduce vulnerability to protectionist shocks. This study aims to determine the reaction of capital markets to Trump's reciprocal tariff policies in the Southeast Asian region. This study employs an observation period of five days before and five days after the announcement of Trump's reciprocal tariffs, by comparing stock market returns in ASEAN countries, especially Indonesia, Malaysia, Vietnam, Singapore, Thailand, and the Philippines. The test was conducted by comparing returns before and after the event. The test results show that the Singapore and Malaysian stock markets reacted negatively while the capital markets of other ASEAN countries did not show significant reactions.

Keywords – Market Reaction, Southeast Asian Stock Market, policy Trump tariffs, abnormal returns