Tariffs and corporate political activity: a survey experiment on US businesses

Abstract The trade war with China has cost US producers and consumers hundreds of billions of dollars since 2018. Yet relatively few US businesses took action to oppose it. This study reports the results of an elite survey experiment on business political activity toward trade policy. Researchers presented business managers with information about the input costs of the new tariffs to their bottom line—information that most subjects acknowledged that they lacked—and invited them to take political action to express support or opposition to these tariffs. The results suggest that the novel information on economic costs did not significantly increase managers’ propensity to contact members of Congress, donate to political campaigns, sign petitions, or join social media groups. We also found that the firm’s political culture (liberal or conservative) did not significantly influence the effectiveness of the treatment. However, descriptive analysis showed that firm political culture was strongly related to the company’s support for the trade war, suggesting that these preexisting political beliefs were resistant to new information provided in our experiment even if that information could affect the company’s bottom line.