US’s Trade Wars and Their Impact on Global Equity Markets: A GARCH Approach

This paper investigates the impact of U.S. trade war announcements under the Trump administration on global equity market volatility. Using a GARCH(1,1) model, the study analyzes stock market returns from the U.S. (S&P 500), China (SSE Composite), and Europe (Euro Stoxx 50) over key policy announcement periods from 2017–2020. The results indicate significant volatility clustering and asymmetrical market reactions to tariff threats, especially in emerging markets and export-driven economies. Findings reveal that Trump's trade tweets and formal policy implementations produced measurable volatility, with global spillover effects.