The Impact of Economic Sanctions on US Trade: Andrew Rose's Gravity Model

Policy Brief
03-4
April 2003

By one reckoning, total US bilateral merchandise trade with countries targeted by extensive sanctions was reduced by as much as $25 billion in 1999. The United States may have lost an additional $6.6 billion in bilateral services trade that same year due to sanctions. But, estimates based on Andrew Rose's gravity model suggest that US bilateral merchandise trade in 1999 was reduced by just $11.5 billion. While the authors estimate that the economic cost to the United States of foreign policy sanctions has probably not increased in the past five years, the absolute level of lost exports and imports remains very high.