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How Do US Economic Sanctions Affect EU's Trade with Target Countries?

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  • Jiawen Yang
  • Hossein Askari
  • John Forrer
  • Lili Zhu

Abstract

We investigate the impact of US economic sanctions on EU's trade using a panel data approach expressed in a two‐level framework. Both multilateral and unilateral sanctions involving the US and the EU have a negative impact on EU trade (total, imports and exports). We argue that unilateral sanctions, if extensive in nature, would have a depressing impact on target countries’ trade, especially in the stage after sanctions have been imposed. Over time, both multilateral and unilateral sanctions lead to an increase in a target country's exports to the EU, lending support to the third‐country effect of sanctions.

Suggested Citation

  • Jiawen Yang & Hossein Askari & John Forrer & Lili Zhu, 2009. "How Do US Economic Sanctions Affect EU's Trade with Target Countries?," The World Economy, Wiley Blackwell, vol. 32(8), pages 1223-1244, August.
    • Handle: RePEc:bla:worlde:v:32:y:2009:i:8:p:1223-1244
    DOI: 10.1111/j.1467-9701.2009.01190.x
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    Cited by:

    1. Azimzhan Khitakhunov & Bulat Mukhamediyev & Richard Pomfret, 2017. "Eurasian Economic Union: present and future perspectives," Economic Change and Restructuring, Springer, vol. 50(1), pages 59-77, February.
    2. Bali, Morad & Rapelanoro, Nady, 2021. "How to simulate international economic sanctions: A multipurpose index modelling illustrated with EU sanctions against Russia," International Economics, Elsevier, vol. 168(C), pages 25-39.
    3. Tibor Besedeš & Stefan Goldbach & Volker Nitsch, 2017. "You’re banned! The effect of sanctions on German cross-border financial flows," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(90), pages 263-318.
    4. Piotr Lukaszuk, 2021. "You can smuggle but you can't hide: Sanction evasion during the Ukraine crisis," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 71(01), pages 73-125, December.
    5. Patrick Maximilian Weber & Beata Stępień, 2020. "Conform or challenge? Adjustment strategies of sanction‐torn companies," The World Economy, Wiley Blackwell, vol. 43(11), pages 3006-3024, November.
    6. Baran Han, 2018. "The role and welfare rationale of secondary sanctions: A theory and a case study of the US sanctions targeting Iran," Conflict Management and Peace Science, Peace Science Society (International), vol. 35(5), pages 474-502, September.
    7. repec:wsr:wpaper:y:2017:i:174 is not listed on IDEAS
    8. Moteng, Ghislain & Raghutla, Chandrashekar & Njangang, Henri & Nembot, Luc Ndeffo, 2023. "International sanctions and energy poverty in target developing countries," Energy Policy, Elsevier, vol. 179(C).
    9. Heydarian, Samira & Pahlavani, Mosayeb & Mirjalili, Seyed Hossein, 2023. "Financial Sanctions and the Imports of Intermediate and Capital Goods in Iran: DID Method," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 15(2), pages 101-134.
    10. Charles A. Rarick & Thaung Han, 2010. "Economic Sanctions Revisited: Additional Insights Into Why They Fail," Economic Affairs, Wiley Blackwell, vol. 30(2), pages 68-70, June.
    11. Liudmila Popova & Ehsan Rasoulinezhad, 2016. "Have Sanctions Modified Iran’s Trade Policy? An Evidence of Asianization and De-Europeanization through the Gravity Model," Economies, MDPI, vol. 4(4), pages 1-15, October.
    12. Nguyen, Trung Thanh & Do, Manh Hung, 2021. "Impact of economic sanctions and counter-sanctions on the Russian Federation’s trade," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 267-278.
    13. Devasmita Jena & C. Akash & Prachi Gupta, 2024. "Deflecting economic sanctions: do trade and political alliances matter?," International Economics and Economic Policy, Springer, vol. 21(3), pages 543-567, July.
    14. Ioana M. PETRESCU, 2016. "The Effects of Economic Sanctions on the Informal Economy," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 4(4), pages 623-648, December.
    15. Afesorgbor, Sylvanus Kwaku & Mahadevan, Renuka, 2016. "The Impact of Economic Sanctions on Income Inequality of Target States," World Development, Elsevier, vol. 83(C), pages 1-11.
    16. Jun Wen & Xinxin Zhao & Quan-Jing Wang & Chun-Ping Chang, 2021. "The impact of international sanctions on energy security," Energy & Environment, , vol. 32(3), pages 458-480, May.
    17. Gleb Aksenov & Ronglin Li & Qamar Abbas & Houlda Fambo & Sergey Popkov & Vadim Ponkratov & Mikhail Kosov & Izabella Elyakova & Marina Vasiljeva, 2023. "Development of Trade and Financial-Economical Relationships between China and Russia: A Study Based on the Trade Gravity Model," Sustainability, MDPI, vol. 15(7), pages 1-39, March.
    18. Frank, Jonas, 2018. "The effects of economic sanctions on trade: New evidence from a panel PPML gravity approach," Hohenheim Discussion Papers in Business, Economics and Social Sciences 17-2018, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    19. Golub Jonathan, 2020. "Improving Analyses of Sanctions Busting," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 26(2), pages 1-20, May.
    20. Fedoseeva, Svetlana, 2016. "Russian Agricultural Import Ban: Quantifying Losses Of German Agri-Food Exporters," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244867, German Association of Agricultural Economists (GEWISOLA).
    21. Salamat Ali & Richard Kneller & Chris Milner, 2017. "Market-specific trade costs and firm dynamics in Pakistan: Evaluating the US integrated cargo containers control programme," Discussion Papers 2017-02, University of Nottingham, GEP.

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