Who’s Afraid of Tariffs? The Geographic Distribution of Fear and Loss

On April 2nd 2025, after markets closed, the United States announced steep “Liberation Day” tariffs against most of its trading partners, many of which announced retaliatory tariffs. Market uncertainty spiked, consistent with the magnitudes and scope of the tariffs being unexpected. The prospect of a global trade war sent US stock markets down over ten percent until the US “paused” its tariffs on April 9th 2025, whereupon markets recovered. Portfolios of the stocks of firms headquartered in “redder” (more Republicans per Democrat) counties lost more value during this window.