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(Trade) War and peace: How to impose international trade sanctions

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  • de Souza, Gustavo
  • Hu, Naiyuan
  • Li, Haishi
  • Mei, Yuan

Abstract

What is the most cost-efficient way to impose trade sanctions against Russia? We build a quantitative model of international trade with input–output connections. Sanctioning countries choose import tariffs to simultaneously maximize their income and minimize Russia’s income, with different weights placed on these objectives. We find, first, that for countries with low willingness to pay for sanctions against Russia, the most cost-efficient sanction is an approximately 20% tariff on all Russian products. Second, if countries are willing to pay at least US$0.70 for each US$1 drop in Russian welfare, an embargo on Russia’s mining and energy products is the most cost-efficient policy.

Suggested Citation

  • de Souza, Gustavo & Hu, Naiyuan & Li, Haishi & Mei, Yuan, 2024. "(Trade) War and peace: How to impose international trade sanctions," Journal of Monetary Economics, Elsevier, vol. 146(C).
    • Handle: RePEc:eee:moneco:v:146:y:2024:i:c:s0304393224000254
    DOI: 10.1016/j.jmoneco.2024.103572
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    References listed on IDEAS

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    Cited by:

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    2. Yalcin, Erdal & Felbermayr, Gabriel & Kariem, Heider & Kirilakha, Aleksandra & Ohyun, Kwon & Syropoulos, Constantinos & Yotov, Yoto, 2024. "The Global Sanctions Data Base - Release 4: The Heterogeneous Effects of the Sanctions on Russia," School of Economics Working Paper Series 2024-8, LeBow College of Business, Drexel University.
    3. Jesús Fernández-Villaverde & Yiliang Li & Le Xu & Francesco Zanetti, 2025. "Charting the Uncharted: The (Un)Intended Consequences of Oil Sanctions and Dark Shipping," Economics Series Working Papers 1070, University of Oxford, Department of Economics.
    4. Gustavo de Souza & Haishi Li, 2025. "The Employment Consequences of Anti-Dumping Tariffs: Lessons from Brazil," CESifo Working Paper Series 11654, CESifo.
    5. Haishi Li & Zhi Li & Ziho Park & Yulin Wang & Jing Wu, 2024. "To Comply or Not to Comply: Understanding Neutral Country Supply Chain Responses to Russian Sanctions," CESifo Working Paper Series 11110, CESifo.
    6. Cathrin Mohr & Christoph Trebesch, 2024. "Geoeconomics," CESifo Working Paper Series 11564, CESifo.

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    More about this item

    Keywords

    Trade sanctions; Tariffs; Tariff competition;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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