The Impact of Trade Sanctions and Export Control Laws on Global Business Operations

Abstract

In an era of escalating geopolitical tensions, trade sanctions and export control laws have emerged as pivotal instruments of economic statecraft, profoundly disrupting global business operations. This mixed-methods study investigates their multifaceted impacts across technology, energy, and manufacturing sectors, drawing on primary data from surveys and interviews with executives from over 50 multinational corporations and small-to-medium enterprises, complemented by secondary analysis of OFAC, UN, WTO, and UN Comtrade databases. Findings reveal significant operational disruptions 25-35% extensions in supply chain lead times and 20-30% increases in logistics costs driven by rerouting and compliance pressures. Financial burdens are substantial, with annual compliance costs averaging $1.5-3 million per firm and regulatory fines exceeding $500 million in 2025. Strategic adaptations, including supplier diversification and market redirection, offer partial mitigation but introduce inefficiencies and innovation bottlenecks, particularly in AI and semiconductors. Sectoral disparities highlight technology’s acute vulnerability to R&D delays (35%) compared to energy’s supply volatility (18% delays). SMEs face disproportionate survival risks, underscoring structural inequities in regulatory exposure. Theoretically grounded in institutional, resource dependence, and transaction cost frameworks, the study addresses gaps in longitudinal resilience and SME-focused research. Practical implications advocate for AI-enabled risk screening, integrated compliance programs, and scenario planning. Policy recommendations call for multilateral harmonization of export controls and enhanced public-private intelligence sharing to reduce enforcement frictions. Despite limitations in sample scope and self-reported data, the research provides a comprehensive framework for building business resilience amid weaponized trade, urging adaptive governance to balance security imperatives with global economic stability.

Keywords: Trade Sanctions, Export Controls, Global Supply Chains, Compliance Costs, Strategic Adaptation, Geopolitical Risk, SME Resilience