Domestic Product Market Impacts of Politically Motivated Foreign Tariffs

• 成果类型: Article; Early Access
• 署名作者: Burd, Carlyle S.; Ferguson, Duke
• 署名单位: North Carolina State University; University of Kentucky
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826; 1558-7967
• DOI: 10.2308/TAR-2024-0708
• 发表日期: 2026-08-17
• 关键词: tariffs; indirect taxes; product prices; WHISKEY; empirical-evidence; OPTIMUM TARIFFS; pass-through; COMPETITION; prices; firm

摘要

We examine how foreign non-income tax shocks affect U.S. product markets. Our setting is the politically motivated tariffs on U.S. whiskey exports levied during the 2018 trade war, which created an exogenous negative foreign demand shock for domestic producers. Using a difference-in-differences design we show that, on average, U.S. whiskey producers decrease U.S. product prices and thus increase domestic sales volume following the export tariffs. However, we find evidence of strategic pricing, as producers increase prices of locally produced products in primary production states (Kentucky and Tennessee) and more significantly decrease prices in states where whiskey consumption is less popular. Further, we show that U.S. whiskey producers implement smaller product price decreases in states with greater tariff-related media exposure and reduce advertising spending nationwide but not in Kentucky and Tennessee. Taken together, these findings provide timely evidence regarding how foreign trade restrictions impact the U.S. product market and consumer outcomes.