This study investigates the effect of protectionist tariffs on firm performance, income tax payments, and shareholder payouts and investment. Using the US–China trade war and related Section 301 tariffs as a setting, I find that US firms impacted by these tariffs experience decreased firm performance while simultaneously increasing cash tax planning to presumably decrease their total cash burden to the government. I also find that impacted firms decrease shareholder payouts and acquisitions, but do not decrease other real investment activities that may negatively impact operating performance. Cross-sectional analyses confirm that these effects apply to domestic firms, do not appear to be driven by the retaliatory Chinese tariffs, and are more pronounced for those facing higher market competition or applying for exclusions from the protectionist tariffs.