Sanction Spillover and Trade Diversification

How do sanctions affect third-party states? This paper demonstrates how states respond to the systemic risks caused by sanctions by diversifying their trade portfolios. Analyzing trade concentration and sanction data from 1990 to 2020, and also looking at the specific case of President Trump's 2018 national security tariffs, we find that states diversify their trading partners when sanctions disrupt their trade partner networks. These findings highlight the spillover effects of sanctions and the dynamics of trade interdependence.

Christina L. Davis is the Edwin O. Reischauer Professor of Japanese Politics in the Department of Government and Director of the Program on U.S.-Japan Relations at Harvard University.  Her research interests include the politics and foreign policy of Japan, East Asia, and the study of international organizations with a focus on trade policy. She is the author of several books, including Why Adjudicate? Enforcing Trade Rules in the WTO (Princeton University Press 2012, winner of the international law best book award of the International Studies Association, Ohira Memorial Prize, and co-winner of Chadwick Alger Prize). Currently she is working on several projects on the evolving trade order and economic sanctions. 

This seminar will be held in E40-496 (Pye Room). Lunch will be available. Please RSVP here.

Contact Kate Danahy at kdanahy@mit.edu with any questions. 

This event is part of the CIS Global Research & Policy Seminar Series. Join our mailing list here to learn about upcoming seminars in the series.