UC Irvine

Currently trade sanctions are drastically affecting world commerce, economies, industries, companies, and potentially the well-being of individuals around the world. Even global peace is threatened by the growing frictions among major countries. The question we explore is how politically motivated economic sanctions affect commercial interactions within targeted countries. We focus on the case of American economic sanctions of the last half century. To the task we apply findings regarding negotiation processes and outcomes between more than 1200 experienced businesspeople in twenty-one cultural regions and countries around the world. Economic outcomes in intracultural buyer-seller negotiation simulations were found to be lower in the six cultural regions on which the United States has applied broadly comprehensive sanctions. We conclude that this “hidden” damage done can hurt international cooperation well beyond the period of the sanctions. The scope and relevance of the work is very broad, connecting concepts and theories from political science, economics, trade, anthropology, marketing science, negotiation, and, of course, business ethics. Our findings are useful for theorists, policy makers and managers of firms considering market entry to recently sanctioned countries. Specific guidance for amelioration of the negative and largely unintended consequences of sanctions on target countries are provided.