New Report from S&P Global Market Intelligence Unveils Three Tools Utilizing Alternative Data and AI to Address Potential Trump Administration Tariffs

Rhea-AI Summary

S&P Global Market Intelligence has released a new report analyzing the impact of potential Trump administration tariffs using alternative data and AI tools. The study reveals that companies with significant international operations and high U.S. sales underperformed peers by 3.9% in stock prices from 2017 to 2019, while companies with higher U.S. headcount and lower U.S. revenue earned an 11% equity premium.

The report, titled 'Three Tools for Trump Tariffs 2.0,' utilizes advanced AI techniques including social media headcount data, business relationship algorithms, and ProntoNLP. Key findings show that tariff-targeted firms experienced a 17% change in supply chain strategy from 2017-2019, with Automobiles & Components sector seeing a 37% disruption. Analysis of earnings calls showed a 50.7% increase in supplier diversification discussions, reaching 57% in Q3 2024.

Positive

• Development of AI-powered tools for real-time tariff impact analysis
• Companies with higher U.S. headcount and lower U.S. revenue earned 11% equity premium
• Sharp decline in tariff-related negative sentiment from 420 to below 20 since Q3 2021

Negative

• Companies with high U.S. sales and international operations underperformed peers by 3.9%
• Tariff-targeted firms faced 17% supply chain strategy disruption
• Recent spike in tariff discussions indicates potential market concerns

NEW YORK, Jan. 29, 2025 /PRNewswire/ -- 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," said Daniel Sandberg, managing director at S&P Global Market Intelligence. "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 & 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 2024, up 50.7% since the start of the post-pandemic period.
  
  
• Despite a significant increase in tariff discussions in Q3 2024, 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 2021. However, with tariff mentions recently spiking, stakeholders can watch net negativity as a bellwether.

To request a copy of the full report or speak with our experts, please contact press.mi@spglobal.com.

S&P Global Market Intelligence's opinions, quotes, and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendation to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security.

About S&P Global Market Intelligence

At S&P Global Market Intelligence, we understand the importance of accurate, deep and insightful information. Our team of experts delivers unrivaled insights and leading data and technology solutions, partnering with customers to expand their perspective, operate with confidence, and make decisions with conviction.

S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI). S&P Global is the world's foremost provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help many of the world's leading organizations navigate the economic landscape so they can plan for tomorrow, today. For more information, visit www.spglobal.com/marketintelligence.

Media Contact
Amanda Oey
S&P Global Market Intelligence
P. +1 212-438-1904
E. amanda.oey@spglobal.com or press.mi@spglobal.com 

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SOURCE S&P Global Market Intelligence

FAQ

How did SPGI's analysis show tariffs affecting international companies with high U.S. sales?

According to S&P Global Market Intelligence's report, companies with significant international operations and high U.S. sales underperformed their peers by 3.9% in stock prices from 2017 to 2019.

What supply chain changes did tariff-targeted companies experience according to SPGI's report?

Tariff-targeted firms experienced a 17% change in their overall supply chain strategy from 2017 to 2019, which was 5 percentage points higher than non-target peers.

How has the sentiment around tariff discussions changed since Trump's first administration according to SPGI?

The net negativity associated with tariff mentions has declined sharply from over 420 during the first Trump Administration to below 20 since Q3 2021.

What percentage of companies discussed supplier diversification in Q3 2024 according to SPGI's analysis?

According to the report, 57% of responses highlighted supplier diversification strategy in Q3 2024, representing a 50.7% increase since the start of the post-pandemic period.

Which industry faced the largest tariff-related disruptions according to SPGI's report?

The Automobiles & Components industry faced the largest disruptions at 37% change in supply chain strategy.