Vol. 11, Special Issue 11, Part A (2025)

Abstract
This study examines financial market responses to tariff announcements made by Donald Trump during his 2025 presidency, focusing on comparing India's reactions to those of key global markets. Using a qualitative, event-based methodology relying on secondary data from reputable sources, 30 tariff-related events were analyzed within a ±1-day window to capture short-term responses across four asset classes: stock indices, money markets, exchange rates, and gold prices. The findings reveal that U.S. tariff announcements have immediate and far-reaching effects on global financial markets. Stock markets worldwide experienced sharp declines, with the U.S., Germany, Japan, and Hong Kong seeing the most significant sell-offs. Gold prices consistently increased as investors sought safe-haven assets amid increased uncertainty. Currency markets showed divergent responses, with the yen and euro appreciating, while emerging market currencies, such as the Indian rupee, weakened. Money markets generally loosened in anticipation of central bank support. India's financial markets displayed relatively milder volatility and limited spillovers compared to other major economies, indicating a degree of insulation. However, India's directional movements remained aligned with global trends, highlighting its growing integration into international markets. The study confirms the notion that U.S. policy shocks have worldwide implications, validating the adage "when America sneezes, the world catches cold." These findings have important implications for investors, policymakers, and regulators in managing cross-border financial contagion risks and enhancing market resilience in an increasingly interconnected global financial landscape.