Conflict, Sanctions and the Future of World Trade

The report examines how geopolitical tensions and the use of trade sanctions on national security grounds may lead to the fragmentation of world trade. It outlines five scenarios ranging from the isolation of Russia to the creation of competing economic blocs based on shared governance values. The authors argue against a return to competing blocs, citing the high level of modern economic interdependence and the erosion of trust among allies, suggesting instead that sanctions should be limited to the most egregious violations of international law.

• The Russian invasion of Ukraine led to unprecedented sanctions, including the revocation of most-favoured-nation (MFN) status for Russia by the United States, the European Union, Japan, and Canada, which allows these entities to increase tariffs and barriers on Russian imports.
• The document identifies five scenarios for the future of world commerce: 'Russia shunned' (sanctions limited to Russia and Belarus), 'Rehabilitation, eventually' (a pathway to reintegrate Russia following a ceasefire), 'Reactive fragmentation' (sanctions spreading to WTO members supporting Russia), 'Depth between allies' (deeper integration among like-minded nations), and 'Beggar non-allies' (trade cooperation restricted to countries adhering to the liberal international economic order).
• A strategy of returning to competing economic blocs with limited ties is considered flawed because modern geostrategic rivals are deeply economically interdependent, and product innovation often occurs collaboratively across different nations.
• The report argues that the weaponization of trade is a reason for continued engagement rather than decoupling, as governments should seek alternative supplies and specific understandings with critical suppliers rather than demonizing partners.
• The authors suggest that trust and restraint among Western allies have been eroded by populist politics, making the restoration of post-war levels of cooperation unlikely and increasing the risk of short-term opportunism.
• Multinational corporations are increasingly re-evaluating their global footprints through reshoring, near-shoring, and supplier diversification due to frequent supply-chain disruptions and the risk of governments weaponizing globalization.

APA

World Economic Forum (2022). Conflict, Sanctions and the Future of World Trade. https://www3.weforum.org/docs/WEF_Conflict_Sanctions_and_the_Future_of_World_Trade_2022.pdf

Chicago

World Economic Forum. Conflict, Sanctions and the Future of World Trade. 2022. https://www3.weforum.org/docs/WEF_Conflict_Sanctions_and_the_Future_of_World_Trade_2022.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Conflict, Sanctions and the Future of World Trade |date=May 2022 |url=https://www3.weforum.org/docs/WEF_Conflict_Sanctions_and_the_Future_of_World_Trade_2022.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2022conflict, author = {{World Economic Forum}}, title = {{Conflict, Sanctions and the Future of World Trade}}, institution = {World Economic Forum}, year = {2022}, month = may, url = {https://www3.weforum.org/docs/WEF_Conflict_Sanctions_and_the_Future_of_World_Trade_2022.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }