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How Should Sanctions Account for Bystander Countries?

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  • John Sturm

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.

Suggested Citation

  • John Sturm, 2023. "How Should Sanctions Account for Bystander Countries?," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 39-42, May.
    • Handle: RePEc:aea:apandp:v:113:y:2023:p:39-42
    DOI: 10.1257/pandp.20231044
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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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