Trouble at Tesla and protests against Trump's tariffs suggest consumer boycotts are starting to bite

Sydney: When the United States starts a trade war with your country, how do you fight back? For individuals, one option is to wage a personal trade war and boycott products from the US.

President Donald Trump has said no nation will be exempt from his tariffs, and this includes both Australia and New Zealand. His tariffs on all steel and aluminium imports, in particular, could hurt the sector in Australia, while New Zealand’s meat and wine exports to the US could also feel the effect.

So far, political leaders have responded differently. Canada, Mexico and the European Union have imposed reciprocal tariffs on the US, while Australia has indicated it will not retaliate.

But whether governments choose to push back or not, citizens in those and other countries are making their own stands. This includes artists such as renowned pianist Andras Schiff, who has cancelled his upcoming US tour.

Most notably, collective outrage at the US president has led to a growing global boycott of Elon Musk’s Tesla due to his role in the Trump administration. Sales of new Tesla vehicles are down 72% in Australia and 76% in Germany. The share price has dropped by more than 50% since December 2024, with calls for Musk to step down as chief executive.

Some governments are even encouraging consumer boycotts. The Canadian government, for example, has urged citizens to “fight back against the unjustified US tariffs” by purchasing Canadian products and holidaying in Canada.

Canadians are clearly embracing this advice. Road trips to the US have dropped by more than 20% in the past month and US liquor brands have been removed from some Canadian stores altogether.

This rise in calls for boycotts of American brands and companies is unsurprising in the Trump 2.0 era, where the lines between government and corporate America have become increasingly blurred.

Political change by proxy

When people want to protest a government policy, but have no political leverage because they’re not citizens of that country, boycotting corporations or brands gives them a voice. These actions are sometimes called “surrogate” or “proxy” boycotts.

This form of “political consumerism”, where individuals align their consumption choices with their values, is now one of the most common forms of political participation in western liberal democracies.

When France opposed the war in Iraq in 2003, US supporters of the war aimed boycotts at French imports. Consumers in the US, United Kingdom and elsewhere have boycotted Russian goods over the invasion of Ukraine, and targeted Israel over its military action and policies in Gaza and the West Bank.

Most famously, protests against the apartheid regime in South Africa from the 1950s through to the 1990s helped isolate and eventually change its government.

The current boycotts are not just protesting Trump’s trade war, of course. They are also about the role of unelected leaders from the corporate world, such as Musk and the heads of the Big Tech and social media companies, and their perceived self-interest and influence.

Trump has responded angrily to consumer boycotts, calling the actions against Tesla “illegal”, which they are not. Indeed, political leaders like Trump often argue that consumer action, rather than government regulation, should be relied on to ensure corporations conform to social expectations.

How to wage a personal trade war

Consumer boycotts do create change under certain conditions – typically when there is a contained problem that the targeted corporation has the power to solve.

For example, consumer boycotts against Nestlé in the 1970s over false and dangerous marketing of powdered milk for infants led to changes in the firm’s marketing approaches. Boycotts of Nike products over sweatshop conditions for workers had a direct impact on the company’s bottom line and led to improvements.

Things may still need to improve at Nestlé and Nike, but these boycotts show consumer pressure can catalyse corporate action. However, it is much harder – though not impossible – for boycott campaigns to succeed when the target is a government.

Consumers boycotting American products can amplify the impact of their protest by also lobbying retailers. For example, if enough consumers stop buying a bottle of soft drink from the US, major supermarkets like Woolworths and Foodstuffs will stop buying thousands of bottles.

There are also other ways to “vote with your wallet”. People can engage in “political investorism” by using their power as a shareholder, bank customer or pension-fund member to express their political views.

After Russia’s invasion of Ukraine, for example, investors sought to divest from Russian companies, and superannuation funds were pressured by their members to do the same.

As consumers and investors, individuals can wage a personal trade war, sending a clear message. Trump may not be willing to listen to the leaders of allied nations, but if consumer and investor pressure is sustained and spreads globally, he may yet hear the voice of corporate America.