Now, anyone who looks at the actual effects of international trade knows that the first proposition is wrong: trade isn’t just about selling stuff, it’s about getting better, cheaper stuff both to consume and to use as inputs in production. But you might assume that at least the second proposition is true: a round of tariff retaliation should reduce foreign exports to the U.S. more than it reduces U.S. exports to the rest of the world, simply because those foreign exports are bigger to start with.

But maybe not. A new study from the European Central Bank suggests that even though the U.S. runs trade deficits, a trade war would reduce demand for U.S. goods more than it would reduce demand in the rest of the world. The Bank of England has reached a similar conclusion.

Let’s be clear: these are the results of models, not actual experience, and could be wrong. But it’s still worth asking why the modelers are getting this result. The short answer is the phenomenon known in the field as “trade diversion.”

For simplicity, think of the world as three economies: America, China, and Europe. Both the ECB and the BOE are assuming scenarios in which America raises tariffs on China and Europe, with China and Europe retaliating. But China and Europe don’t raise tariffs on each other.

Such a scenario gives both foreign consumers and foreign producers a lot of options to diversify away from America. Chinese producers, facing U.S. tariffs, can sell more to Europe instead; Chinese consumers, instead of paying tariffs on goods imported from America, can seek substitutes from Europe. The story for Europe is the same. But U.S. consumers and businesses won’t have comparable flexibility.