In answering a call for more work examining the portfolio of nonmarket strategy choices, we propose the concept of strategic argumentation to analyze an under-studied aspect of corporate political strategy: when a firm goes into a room with a regulator, an important aspect of the firm’s strategy is what specific arguments it presents to persuade the regulator. Through strategic argumentation, firms provide an intellectual architecture for supporting the underlying logic of the regulator’s policy paths that the firms prefer. Analyzing a hundred thousand applications submitted by U.S. firms to the office of the United States Trade Representative (USTR) for tariff exemptions during the U.S.-China Trade, we quantify applicant firms' various arguments based on Chinese technological threats, U.S. national interests, global supply chain constraints, and so on. We show that such strategic arguments matter to a significant degree in explaining firm-level outcomes even after controlling for various forms of resource expenditure in political influence. To further understand why some arguments work as intended, while other arguments were either ineffective or even backfired, we conducted in-person interviews in Washington, D.C., with regulators and lobbying firms that participated in the USTR tariff exemption process . We further find that, to achieve sustained political strategy success, firms’ choice of strategic arguments has to be dynamically consistent with a changing and turbulent nonmarket environment.
