Title: Comments on Tariffs: Private Influence on Trade Policy
Author: Zoe Xincheng Ge
What makes firms politically influential in trade policy? This paper explores the redistributive function of trade policy that allows the government to privilege one group at the expense of others and examines how policymakers' domestic political incentives affect firms' influence in trade policy. With the product-level variation in tariff changes, the case of the U.S.-China trade war provides an ideal setting to investigate the determinants of firms' political influence. Using a new dataset of public comments on three proposed tariff lists of Chinese imports in 2018, this paper constructs a variable of comment efficacy by matching whether the requested direction of movement of specific product codes in a comment is consistent with the changes between the proposed and final tariff lists. The results show that comments from firms in districts that swung to Trump in the 2016 presidential election are likely to have more effective requests than comments from firms in districts that did not switch electoral votes, while comments from firms in districts that swung to Clinton do not have such an effect. The results are robust to the inclusion of lobbying experience and coalition lobbying. This paper reveals the importance of geography in determining firms' political influence. It also sheds light on the puzzle of why electorally motivated politicians have incentives to initiate an economically inefficient trade policy that can reduce electoral support.