FIRCs by the US in Latin America had a major negative impact on trade 💰. This study analyzes decades of economic data 📊 and finds FIRC caused average bilateral trade drops of 45%. The intervention's effects were far stronger than expected ⚠️. Three theories competed to explain this result: strengthening trade relationships, disrupting markets, or harming investment climates 🏦. Using gravity models 🔢 and synthetic controls for robustness testing 💪, the analysis concludes that FIRC consistently reduced trade flows regardless of context. Further evidence from sector-level archives and targeted case studies confirms these findings.
