How Should Sanctions Account for Bystander Countries?

John Sturm

AEA Papers and Proceedings, 2023, vol. 113, 39-42

Abstract: Neutral "bystander countries" have profoundly shaped the impact of trade sanctions imposed on Russia following its invasion of Ukraine. How should sanctions account for the presence of such bystanders? I study this question in a simple trade model where a sanctioning country places tariffs on imports from a sanctioned country in the presence of a neutral third country. Optimal tariffs-as-sanctions are lower on goods that the sanctioner can import from bystanders. On goods that the sanctionee can export to bystanders, tariffs-as-sanctions are higher given an elasticity of (excess) supply to the sanctioner but lower given a total elasticity of supply.

JEL-codes: F12 F13 F51 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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DOI: 10.1257/pandp.20231044

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