A new report from S&P Global Market Intelligence reveals how alternative data and artificial intelligence (AI) tools can help businesses quantify the impact of U.S. tariffs at both the company and product levels. The findings show that companies with significant international operations and high U.S. sales are especially vulnerable. Notably, equity investors in these firms saw stock prices underperform peers by 3.9%, from 2017 to 2019. In contrast, companies with a higher U.S. headcount and lower U.S. revenue earned an 11% equity premium over peers.
Titled “Three Tools for Trump Tariffs 2.0,” the report utilizes alternative data and advanced AI techniques, including headcount data sourced from social media job profiles, business relationships estimated using a patented data science algorithm and natural language processing from the company’s recently acquired ProntoNLP.
“Combining unique alternative data and AI allows us to quantify and monitor impacts in near real time, down to the company and product level,” Daniel Sandberg, managing director at S&P Global Market Intelligence, said. “In today’s complex and unpredictable landscape, it’s crucial for stakeholders to effectively forecast and nowcast the implications of tariffs on their strategies.”
Key highlights from the report include:
During the last Trump Administration, tariff-targeted firms experienced a 17% change in their overall supply chain strategy from 2017 to 2019, which is 5 percentage points higher than non-target peers. Some tariff-targeted industries faced even larger disruptions, such as automobiles and components at 37%.
Analysis of earnings call transcripts processed with a bespoke large language model showed that executives emphasized supplier diversification in response to tariff-related questions, with 57% of responses highlighting this strategy in Q3/24, up 50.7% since the start of the post-pandemic period.
Despite a significant increase in tariff discussions in Q3/24, the net negativity associated with these mentions remains muted, having declined sharply from over 420 during the first Trump Administration to below 20 since Q3/21. However, with tariff mentions recently spiking, stakeholders can watch net negativity as a bellwether.
