Geoeconomic Pressure

Geoeconomic pressure—the use of existing economic relationships by governments toachieve geopolitical or economic ends—has become a prominent feature of global powerdynamics. This paper introduces a methodology using large language models (LLMs) tosystematically extract signals of geoeconomic pressure from large textual corpora. Wequantify not just the direct effects of implemented policies but also the off-path threatsthat induce compliance without formal action. We systematically identify governments,firms, tools, and activities that are involved in this pressure. We demonstrate thatfirms respond differently to various forms of geoeconomic pressure (tariffs, financialsanctions, and export controls), as well responding differently to policies that havebeen implemented versus the threat of future pressure. We use this methodology tostudy the firm-level responses to the ongoing global trade war.