Is the American Soft Power a Casualty of the Trade War?
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.
We thank Jingting Fan, Amit Khandelwal, Nancy Qian, Junji Xiao, Xiaohu Wang, Hongsong Zhang, and seminar participants at Columbia University, a Becker-Friedman Institute conference at University of Chicago, Fudan University, Jinan University, Peking University, Renmin University, Sun Yat-sen University, Tsinghua University, and Wuhan University for constructive comments, Hongjia Zhu for help with the data on weather and air pollution, and Guangyuan Guo, Dongmin Hu, Jiaxin Xiong, and Caiyun Wu for excellent research assistance. Wei thanks the Chazen Institute of International Business at Columbia Business School for a research grant for the project. All errors are the authors’ responsibilities. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.