Abstract
This study develops a text-based measure of firm-level tariff exposure using the sections on business operations and risk factors in corporate fillings from 2024. Firms with higher tariff exposure experience significantly lower abnormal returns around the April 2, 2025 “Liberation Day” tariff announcement in the short term. Subgroup analyses show that the effect is most pronounced among firms with high leverage, strong growth and valuations, high advertising intensity, and low earnings quality. Collectively, disclosure-based tariff exposure emerges as a priced forward-looking risk, providing implications for mandated risk language disclosure, policy uncertainty, and risk channels in asset pricing.