Systemic Economic Importance and Robustness to Trade Shocks under Uncertainty

This paper is motivated by shifts in U.S. trade policy that have increased uncertainty for trading partners and created incentives to diversify trade away from the United States as a dominant hub in the global trade network. We derive centrality-based indicators from observed bilateral trade flows to measure systemic influence and evaluate their stability under stochastic trade disturbances. We introduce the Stability-Influence Ratio (SIR) and Mean Absolute Influence Change (MAIC) to evaluate robustness, sensitivity, and the scale of influence responses under uncertainty. We simulate exogenous reductions in trade with a dominant hub and reallocate displaced flows across alternative partners to analyse how aggregate connectivity and countries' relative positions adjust endogenously to network structure. The results reveal three main findings. First, trade shocks generate non-linear responses at both the aggregate and country level. Second, reductions in U.S.-linked trade reduce aggregate connectivity because hub contraction losses dominate redistribution gains at low shock levels. Only beyond an estimated turning point do redirected flows strengthen secondary hubs and generate partial recovery in aggregate centrality. Third, highly central economies remain influential but exhibit greater volatility, while economies with concentrated trade structures experience larger declines in systemic importance. These findings demonstrate that trade policy shocks reduce aggregate connectivity before redistribution effects begin to dominate, and that threshold effects shape systemic outcomes in ways that linear or purely bilateral approaches cannot capture.