Political Power in International Trade
Which countries would suffer most if major trade partners cut ties
When countries sever trade relationships, the pain is rarely equal. Using data from the entire global supply network in 2022, researchers measured how much economic damage each country would suffer from breaking ties with major partners—and found stark imbalances: the United States has leverage over all its trading partners, China over all but one, and countries on the economic periphery like Belarus face devastating losses from severing ties with neighbors while barely denting those neighbors' economies. The asymmetry stems not from trade imbalances but from a country's position in the global network: central hubs can easily find alternatives, while dependent nations cannot.
Trade negotiations and sanctions are built on assumptions about mutual vulnerability, but this research shows the leverage is wildly unequal. A country's actual bargaining power in trade disputes depends on how easily it can switch suppliers or find new buyers—something determined by its position in the global economy, not the size of its bilateral trade deficit. Policymakers threatening sanctions or trade restrictions often overestimate their leverage and underestimate the costs to their own economies if a partner retaliates by finding alternatives.