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Is the American Soft Power a Casualty of the Trade War?

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Listed:
  • Haichao Fan
  • Yichuan Hu
  • Lixin Tang
  • Shang-Jin Wei

Abstract

The US trade war against China in 2018–2019 can either enhance or diminish the US soft power in China, depending on whether it is recognized as legitimate by Chinese citizens. We study how the viewership of US movies—an important element of the US soft power—is affected by the trade war, utilizing variations across Chinese cities in the exposure to the Trump tariffs. We find a significant reduction in US movie revenue in regions more exposed to the Trump tariffs, but no corresponding reduction in the consumption of non-US movies. This is corroborated by a decline in online search for US movies, US tourist destinations, and US branded sports shoes. The aversion to US movies appears to persist at least to 2021. The effect is somewhat milder for more affluent people.

Suggested Citation

  • Haichao Fan & Yichuan Hu & Lixin Tang & Shang-Jin Wei, 2022. "Is the American Soft Power a Casualty of the Trade War?," NBER Working Papers 29999, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29999
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    Cited by:

    1. Ding, Guanzu & Guo, Guangyuan & Wu, Caiyun & Yu, Jiawen, 2022. "China-US trade friction and welfare: The role of regional trade agreements," Economic Modelling, Elsevier, vol. 113(C).

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F6 - International Economics - - Economic Impacts of Globalization

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