U.S. ECONOMIC SANCTIONS: An Empirical Study

Using a gravity model, we conduct an empirical analysis of the impact of U.S. economic sanctions on U.S. trade with target countries and on third countries. Our findings show that the impact on U.S. trade is very sensitive to how the sanctioned country list is identified and selected. We find no significant impact of U.S. economic sanctions on trade between the United States and countries that are subject to selective sanctions. For only countries subject to comprehensive sanctions have we found a significant reduction in bilateral trade; and these same sanctions increased trade between target countries and the EU or Japan. Using a sample that includes only the formerly planned economies that were long the target of U.S. economic sanctions in recent history, our results show that U.S. economic sanctions have a significant impact on U.S. exports, imports, and total trade with these countries, and these effects have lingered for more than a decade after the Cold War had ended.