Abstract
We study the impact of financial sanctions on international trade. To pursue this objective, we assemble new data that distinguish between six types of financial sanctions across all countries in the world over the period 1950-2025. Combining these data with aggregate and disaggregated trade data in a structural gravity framework, we find that financial sanctions can exert substantial adverse effects on trade. However, these effects are highly heterogeneous across sectors, across sanction cases, and, most importantly, across the different types of financial sanctions in our data. Payment restrictions are most effective in eliminating trade between senders and targets. Unlike sanctions on goods, they also significantly reduce trade between targets and third countries.