Collaboration between competitors offers significant benefits, yet transitioning from rivals to collaborators is a challenging process. This study examines how tariff reductions, which intensify foreign competition, influence the formation of strategic alliances and the use of communal language by domestic firms. We hypothesize that increased foreign competition drives domestic firms to form alliances and adopt communal language to signal their intent to collaborate. Furthermore, we propose that the intensified use of communal language amplifies the effect of foreign competition on alliance formation, serving as both a strategic response and a facilitator of cooperative behavior. Leveraging a quasi-experimental context created by U.S. manufacturing tariff reductions from 1995 to 2011, our findings strongly support these hypotheses. The results highlight communal language’s dual role in responding to competitive pressures and fostering collaboration. This study advances the literature on coopetition, corporate communication, and international business by illuminating how firms balance competition and cooperation under external shocks.
