Abstract:
We extend a quantitative general equilibrium model of global trade networks to evaluate the economic impacts of various trade disruptions. Our analysis considers scenarios such as US-China trade wars, a broader Cold War 2.0 decoupling, Trump-era tariffs, and disruptions in the trade of critical inputs. We assess effects across 34 countries/regions and 38 industries, with a particular focus on Switzerland and its key sectors. We also account for second-layer effects, which can mitigate but, in most cases, amplify or considerably amplify the impacts predicted by our model. By highlighting both vulnerabilities and opportunities within the Swiss economy, we provide insights into the level of resilience of a small open economy to geopolitical shocks.