Working Paper Series
New research on the social, economic, and political consequences of emerging technologies, circulated for discussion and comment ahead of publication.
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Tariffs, Geoeconomics and Political Cleavages: Evidence from American High-Tech Firms
Standard trade theories predicted that capital-intensive firms deeply integrated into global production networks would strongly oppose the Trump administration's announcement of sweeping global tariffs on the "Liberation Day" of April 2nd 2025. Why have American high-technology firms responded with puzzling heterogeneity? We argue that firms that play central roles in US geoeconomic influence strategies receive state compensation through subsidies, contracts, and exemptions, and in exchange exhibit rhetorical forbearance toward tariff policy. We test this argument using a new firm-quarter panel of 486 earnings call transcripts from 65 leading U.S. technology and defense firms (2024Q1–2026Q1), with firm-level measures of tariff negativity and upstreamness generated through a two-step GPT-5.4 pipeline. Incorporating these measures into a difference-in-differences design that leverages Liberation Day as an exogenous shock, we find strong evidence for our theory: hardware firms respond more negatively than digital firms, and more upstream hardware firms respond less negatively than their downstream counterparts. We find consistent results using lobbying disclosure data.
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The Political Economy of Artificial Intelligence: Evidence from Western Europe
While advances in artificial intelligence (AI) are feared to bring about widespread job losses, workers highly exposed to the technology tend to anticipate productivity-driven improvements in their earnings and employment prospects. I argue that this paradox has important political economy implications: if labor complementarities are expected to outweigh substitution effects—raising income without commensurately intensifying employment risks—exposure to AI should weaken rather than strengthen support for redistributive policies and their political advocates. I test this argument using a combination of observational and original experimental data from Western Europe, finding that occupation-level AI exposure is negatively associated with support for redistribution, the left, and the (increasingly pro-welfare) populist right but positively associated with support for the mainstream right. The results enhance our understanding of the political economy of digitalization, suggesting a discrepancy between the perceived distributional consequences of AI and earlier automation technologies that have primarily displaced labor.
Submissions. The series is open to work by CTS members, affiliates, and visitors. Papers are circulated for discussion and comment and have not been peer reviewed; views expressed are those of the authors. Enquiries to ranjit.lall@politics.ox.ac.uk.