Description
Does de-risking supply chains through trade diversification actually increase one's security? While traditional narratives on economic security suggest that trade diversification is a positive component of a state's national security strategy because it can reduce the economic leverage possessed by adversaries, in this paper, I argue that the disentanglement of economies removes trade-based deterrents to war and thus increases the likelihood of conflict. To illustrate this point, I design a formal model based on the Bargaining Model of War to show that when even just one state in a dyadic relationship chooses trade diversification, the likelihood of conflict increases. Using a rare-events logistic regression design, I test the implications of the formal model and find that increases in trade diversification are significantly correlated with increases in the probability of war. These results are robust to different model types. My findings have important implications for contemporary discourse on solutions to the threat of weaponized interdependence and defensive economic security strategies.
