The evidence that the Trump administration tariffs are raising prices paid by consumers continues to accumulate, most notably in the recent decision by the Trump administration to exempt several hundred food products from tariffs to make them more affordable for US households. (After all, if the tariffs were all paid by producers in foreign countries as originally promised, reducing the tariffs would only benefit those same foreign producers, not US consumers.)

A majority of the American public believe the Trump tariffs are pushing up prices, too. Here are results from one recent poll by ABC News/Washington Post/Ipsos:
 

Another recent poll by Economist/YouGov found similar results.
 

• Americans are more likely to favor the U.S. increasing than decreasing trade with foreign countries (42% vs. 11%); 27% think the amount of foreign trade should be kept the same
• A majority (55%) of Americans think that foreign trade makes the average American a lot or somewhat better off; 15% think it makes the average American worse off and 11% think it has no effect
• Only 13% of Americans want tariffs on foreign goods to be increased; 47% would prefer for them to be decreased and 24% want them to be kept the same
• Nearly three-quarters (73%) of Americans say that Trump’s tariffs have increased the prices they’ve paid either a lot (40%) or slightly (33%)
• Majorities of Democrats (92%), Independents (72%), and Republicans (56%) say they’ve paid higher prices as a result of Trump’s tariffs

But these survey results still leave open the question of why many Americans continue to support the tariffs, even though at least some of them recognize that they are paying higher prices for doing so. Alex Imas, Kristóf Madarász, and Heather Sarsons propose an answer in the form of what they call “exclusionary preferences.” A Research Brief with a readable overview and the full working paper are both available.

The basic idea of “exclusionary preferences” is that, for a plurality of people, “We propose that a person’s desire to consume an object or possess an attribute increases in how much others want but cannot have it.” The first step of their research strategy is to see how much people in a laboratory research setting are willing to pay for a good if others in the study are excluded from purchasing the good. For a number of people, the more that others are excluded, the more they are willing to pay.

A second step is then to compare the beliefs of those with strong exclusionary preferences to those who do not have such preferences. Here are some of the findings (as summarized in the Research Brief):

• Exclusionary preferences strongly predict tariff support, but only when tariffs harm trading partners. Those with exclusionary preferences are 12.3 percentage points more likely to support a 15% tariff that would raise prices domestically. When respondents are told the tariff would not harm the foreign country, support between those with and without exclusionary preferences is statistically indistinguishable. …
• Exclusionary preferences predict support for a broad range of protectionist policies that harm domestic consumers. Beyond tariffs, those with exclusionary preferences are significantly more likely to support policies explicitly designed to maintain consumption gaps between nations, even when informed these policies would raise prices for Americans. They also show higher support for restricting foreign investment, emphasizing that the US should “come out on top” in trade relations, and limiting purchases from foreign countries. These patterns held across different trading partners (China, Mexico, and Canada), suggesting the effects are not driven by hostility toward specific nations.
• The relationship between exclusionary preferences and policy support is not explained by political ideology or cognitive biases. While political preferences partially mediate the relationship (Democrats are less likely to hold exclusionary preferences), the core association remains strong and statistically significant after controlling for party affiliation and zero-sum thinking (a cognitive bias where people believe gains for some come at others’ expense). 

These results remind me of an intro-level teaching tool when studying economic growth. The lecturer can ask the class for their preferences between two options. In option 1, the US economy grows 3% while other economies around the world grow 4%. In option 2, the US economy grows 2% while other economies around the world grow 1%. For most economists, option 1 is the obvious choice for the US, because the US rate of growth is faster than in option 2. For many students, option 2 is the obvious choice, becuase the US rate of growth is faster compared to other countries, unlike option 1 where the US rate of growth is slower compared to other countries. But the idea that some people have exclusionary preferences based on others receiving less has widespread application.

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