U.S. companies increase imports by 16% from countries that get elected to the UN Security Council.
These trade increases happen even when the foreign countries have no competitive advantage in the products being shipped. American firms use these imports as a strategic tool to build diplomatic relationships and buy international influence. This reveals a hidden political trade mechanism where business deals are a form of shadow foreign policy. The cost of these inefficient trades is often passed on to consumers or subsidized by lobbying efforts. Global commerce is far more tied to geopolitical maneuvering than most economists admit.
The Geoeconomics of Imports: Evidence from UN Security Council Elections
SSRN · 5969894
This paper examines how the United States utilizes imports as a tool of geoeconomic statecraft and how firms participate in it. Exploiting elections to the United Nations Security Council (UNSC), we show that U.S. publicly listed firms increase imports from a country by 16 percent when it rotates onto the Council. This increase is unique to the U.S. relative to comparable developed countries without permanent UNSC membership and is concentrated in products where elected countries lack comparativ