Brendon Carter, University of Illinois Urbana-Champaign
In 2014, after the Russian annexation of Crimea and the resulting Western sanctions on Russia, Russia responded by imposing a ban on most food imports from the sanctioning countries, which included the European Union, the United States, Canada, Norway, and Australia. This study uses a structural gravity model to empirically analyze the impacts of the Russian food embargo on bilateral trade flows, welfare, and prices, paying particular attention to the spillover impacts of this trade restriction on third countries, or countries outside of the ban. The key finding from this analysis is that many third countries underwent price impacts due to the embargo that were as large in magnitude as those for the directly-embargoed countries. The results of this analysis show that sanctions can have strong multilateral impacts that go well beyond their intended scope.
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