Trump’s Tweets about US – China Trade War and Vietnamese Stock Market’s Response

Abstract

This study investigates the impact of political uncertainty induced by the US-China trade war on the Vietnamese stock market from 2016 to 2021. We use Trump’s tweets about US-China trade war as the proxy for political uncertainty. By employing the event study method on stock price data of companies in the VN30, we find that the emergence of trade-war related tweets is linked with negative abnormal returns and enhanced trading activities. The results suggest that Trump’s tweets generating political uncertainty about international collaboration and undermining investors’ positive outlooks. Our findings are of interest to a wide range of market participants who seek to hedge against political risks and policy makers who seek to stabilize financial markets.