The Impact of the United States of America and China Export Rate Setting on Wealth and Liquidity of Shareholders

Abstract

The US-China trade war began in 2017 when both countries-imposed tariffs on
product imports. The purpose of this study is to examine the effect of policy on
shareholder prosperity (as measured by variable abnormal returns) and stock liquidity (as
measured by variable volume trading activity) on the Indonesian Stock Exchange. The
descriptive statistics, normality test, and paired sample t-test are used to analyse the data
where sources of data in this study are secondary data. Secondary data in this study taken
from the daily price of shares listed on the Indonesia Stock Exchange, especially stocks
listed in LQ45 index from 27th June 2018 – 17th July 2018. The findings of this study
indicate that the United States and China's export-import tariff policies on 6th July 2018 do
not have significant differences in terms of return and average trading volume. This means
that the policy contains no information that could be used to influence investor decisions
on the Indonesian Stock Exchange.