The Impact of Economic Coercion on Public Opinion: The Case of US–China Currency Relations

Abstract

In recent years, the United States has increasingly tried to change other governments’ economic policies by threatening to punish those countries if they do not change course. To better understand the political consequences of these tactics, this paper examines how external threats influence public support for policy change in targeted states. We consider three mechanisms through which economic coercion might alter public opinion: by changing individuals’ interests, by activating their national identities, and by providing them with new information about a policy’s distributive effects. To test these rival explanations, we focus on the case of China–US currency relations. Using data from a survey experiment of Chinese internet users, we find strong support for the informational updating theory. Our evidence suggests that economic coercion can reduce support for policy change because it leads individuals to update their beliefs about who wins and loses from economic policy changes.