DOI: 10.32609/j.ruje.11.168943

Authors: Irina V. Kryachko, Henry I. Penikas

Abstract: In April 2025, the United States abruptly announced exceptionally high tariffs on imports from more than 180 countries (levels not seen in nearly 150 years) shocking the global economy. Within a week, most measures were postponed for 90 days (until July 9, 2025), but tariffs on Chinese goods were retained and, immediately prior to implementation, were raised to as high as 145%. China responded by increasing tariffs on U.S. goods to 125%. U.S. equity markets fell by about 10% in the week following the announcement but nearly recovered in May amid speculation that the measures might be withdrawn. By August 2025, headline U.S–China tariff rates converged to roughly 55% and 33%, respectively. Notably, neither country raised duties on Russian imports. Existing assessments (e.g., Yale Budget Lab) focus primarily on the United States. We extend the analysis to Russia and to as many large economies as global input–output tables allow. Using both aggregate and highly disaggregated inter-industry and cross-country linkages within a Leontief framework, we obtain U.S. effects comparable to prior estimates, while the estimated impact on Russian prices and output is negligible. Because substitution and trade rerouting are excluded from the baseline, our results should be interpreted as conservative, lower-bound estimates.

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DOI: 10.32609/j.ruje.11.145396

Authors: Nataliia Vlasova, Ahmed Alwadeai

Abstract: This study investigates the multifaceted relationship between international sanctions and economic freedom, treating it not simply as an economic construct but as a fundamental pillar of societal well-being. Drawing upon a panel dataset of 21 countries subjected to sanctions between 2002 and 2022, we analyze the impact of sanctions — both economic and non-economic — on overall and component-level economic freedom. Methodologically, we integrate Panel-Corrected Standard Errors, Feasible Generalized Least Squares, and Partial Least Squares Structural Equation Modeling, thereby addressing issues such as heteroskedasticity, autocorrelation, and the complexity of multiple interdependent relationships. Our findings reveal a consistent negative effect of sanctions on economic freedom, although the severity and channels of impact vary according to the nature and source of the sanctions, as well as the institutional and temporal contexts. Notably, sanctions imposed by the United Nations emerge as particularly constraining for property rights and monetary freedom, while trade and financial restrictions curtail investment and market openness. At the same time, sanctioned states demonstrate varying degrees of resilience, adapting policies and seeking alternative markets to mitigate sanctions. These outcomes underline the dual nature of sanctions as powerful tools of international diplomacy that can inadvertently undermine economic freedom. By illuminating these dynamics, our study offers insights for policymakers and scholars alike, emphasizing the importance of tailoring sanctions to limit harm to economic liberties while pursuing legitimate foreign policy objectives.

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DOI: 10.32609/j.ruje.8.84097

Authors: Han-Sol Lee, Alexander M. Zobov, Ekaterina A. Degtereva

Abstract: Employing an intercountry trade force (ITF) theory, this paper investigates bilate­ral trade between South Korea and 28 economies of Central Eastern Europe (CEE) and the Commonwealth of Independent States (CIS) based on balanced panel data for the period from 2011 to 2019. Free trade space (FTS) and gravity index (GI) turned out statistically significant and their coefficient signs are in line with the research hypothesis. Our model also confirms that bilateral trade volumes­ are highly enhanced by the quality institutions of CEE and CIS countries. The impact of their good governance becomes larger in relation to South Korea’s exports to those count­ries. A level of market openness (measured by FDI ratio and WTO membership) does not facilitate bilateral trade volumes, in general. However, WTO membership turns out to be a significant and positive factor in promoting CEE and CIS countries’ exports to South Korea. Therefore South Korea must strive to enhance the institutional quality of CEE and CIS countries to ease the process of customs clearance and the conclusion and enforcement of trade contracts, and reduce transaction costs. Liberalizing economies based on internationally acknowledged economic principles will continue to enhance CEE and CIS countries’ exports to South Korea.

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DOI: 10.32609/j.ruje.5.38704

Authors: Michael Baltensperger, Uri Dadush

Abstract: China’s Belt and Road Initiative (BRI) is an international trade and development strategy. Launched in 2013, it is one of the ways that China asserts its role in world affairs and captures the opportunities of globalization. The BRI has the potential to enhance development prospects across the world and in China, but that potential might not be realized because the BRI’s objectives are too broad and ill-defined, and its execution is too often non-transparent, lacking in due diligence and uncoordinated. This article documents the background and context of the BRI, recounts what is known about the extent of the initiative and specifies its various motivations. It highlights that the initiative meets very large infrastructure investments gaps, which is welcome and needed, and that China’s goal of forging stronger links with its trading partners around the world are legitimate, so long, of course, as the underlying intent remains peaceful. Though many observers welcome the BRI, many others oppose it for good reasons, while others misunderstand it and oppose it for bad reasons. The paper identifies and discusses concerns about the initiative that relate to its geopolitical objectives, its priorities, its geographic scope, the role of state-owned enterprises, the allocation of resources, issues of transparency and of due diligence. Particularly, it shows that this initiative deals with a vast number of countries that are in very different states of development and that an apparent lack of well-defined priorities is holding the initiative back. The paper also highlights the issue of debt overload which is distressing several BRI countries and discourages further projects. It points briefly to possible improvements that China and the other stakeholders in the BRI can make to get the most out of their investments. The BRI, to be effective, needs to meet the basic conditions of a trade and development strategy, which are clear objectives, adequate resources, selectivity, a workable implementation plan, due diligence and clear communication. Involvement of multilateral lenders could help with this. Finally, China has to improve the evaluation of project’s risks and costs and step up its due diligence approach to demonstrate that it respects the long-term interests of those countries that are at the receiving end of its BRI projects.

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DOI: 10.1016/j.ruje.2016.06.001

Authors: Silvana Malle

Abstract: This paper argues that Russia has embarked on a difficult path to economic sovereignty and heightened security to withstand rising antagonism from the West that culminated with the application of punitive sanctions against Russia's positioning on Ukraine. With the aim of lessening economic dependence on trade with the EU, its major trade partner for decades, Russia tries to work out a patriotic model of growth based on two vectors: import and trade partner substitution. The pursuit of self-sufficiency in foodstuffs adds an important pillar to security concerns as reflected earlier in the 2010 Doctrine on Food Security. But import substitution will be costly and difficult to manage. Fiscal balances and exchange rates will need to adjust to the new challenges. Finding new partners eastwards is also complicated. Trade with China, in hydrocarbons or other commodities, requires massive infrastructural work that neither the government nor private investors can afford in a situation of financial stringency. Investment from China is slow to materialize as the economic slowdown also impinges on China's projects. Nonetheless important deals on gas and infrastructure have been agreed and are pursued despite difficulties. A favourable institutional framework aimed at attracting investors to the Far East is in place. It will be up to the local administrations to make the best of it and venture capital to run the risk. The outlook is long-term, but both Russia and China have learnt from history to be patient.

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