How do sanctions affect international trade?

Sanctions are measures imposed by one or more countries to restrict or prohibit trade and financial transactions with specific countries or entities. The primary goal of these sanctions is often to compel a change in behavior, such as ceasing human rights violations or halting aggressive military activities. When sanctions are enacted, they create significant barriers to trade, which can include restrictions on exports and imports, asset freezes, and limitations on financial transactions.

This disruption can have a profound effect on global business operations as it may force companies to reevaluate their supply chains, negotiate alternative markets, and adapt to new legal compliance standards. As a result, the affected countries may experience economic decline due to reduced access to international markets, leading to increased costs and operational challenges for companies engaged in international trade. Hence, the impact of sanctions on global business can be extensive, influencing both short-term transactional capabilities and long-term strategic planning.