Tariff Shocks and Firm Decisions: Evidence from a Randomized Survey Experiment

Data is collected via a standardized online questionnaire, which is integrated as a module in the monthly KOF Industry Survey. Participants (i.e. firms) are first presented with a realistically designed vignette outlining a scenario of new US tariffs on Swiss industrial goods. They then answer questions on planned adjustments to sales prices, investments and turnover. The survey is completely anonymous; no personal data is collected and individual conclusions are excluded.

The survey experiment is carried out in two waves:
- Wave 1: May 1st to May 31st
- Wave 2: July 1st to July 31st

We implemented a second survey wave to clarify the question about prices charged by firms. For firms participating in both waves we do the following:
- The firm is exposed to the same vignette in July as the one it was exposed to in May.
- We ask firms how well they recall their answers to the May survey.

2025-05-01

2025-07-31

1) Proportion of firm's total turnover for different export markets (i.e. for the USA, China, E.U., remaining export markets, domestic sales)
2) Expected total firm turnover change in Switzerland
3) Expected firm's (gross) fixed asset investments change in Switzerland
4) Expected firm's sales price change in different sales regions (i.e. the USA, abroad excluding the USA, in Switzerland)

For variables 2,3 and 4 the outcome is both numerical and categorical (e.g. "higher", "the same", "lower").

The study examines the extent to which expectations regarding new US tariffs influence the pricing, investment and sales plans of Swiss industrial firms. The central hypothesis is that announced trade barriers lead to precautionary adjustments in price, investment and sales planning. We compare survey results with a trade networks model and use responses to estimate structural parameters.

Participating firms receive one of the following two vignettes.

Vignette 1: The USA permanently imposes a uniform tariff of 10 % on goods imported from all countries - regardless of their origin. This tariff applies to all product groups, including pharmaceutical products.

Vignette 2: The USA imposes a permanent tariff of 31% on goods imports from Switzerland. Imports from other countries into the USA are subject to different tariff rates, as announced on Liberation Day. Assume that these tariffs apply to all product groups, including pharmaceutical products.

Randomization is done automatically by a computer.

The randomization is done at the firm (i.e. respondent) level. Each firm in our online panel is assigned one of the two vignettes.

No

Wave 1: We expect around 500 firms to answer our online survey and thus participate in the survey experiment.

Wave 2: We expect around 600 firms to answer our online survey and thus participate in the survey experiment. The difference to May (i.e. to the 1st survey wave) is due to the KOF panel structure. In July, the firm pool is slightly larger because it corresponds to the quarterly survey panel (vs. the monthly survey panel in May).

Wave 1: We expect around 500 firms to answer our online survey and thus participate in the survey experiment. Wave 2: We expect around 600 firms to answer our online survey and thus participate in the survey experiment.

Wave 1: As we have only two treatment arms, we expect 250 firms by treatment arm.

Wave 2: As we have only two treatment arms, we expect 300 firms by treatment arm.