Supply Chain Secondary Sanctions

Through what mechanisms can states exploit a target’s economic links to third-party firms to impose economic sanctions? Although China has long objected to the United States’ use of secondary sanctions, Beijing is now adopting similar tactics. We examine China’s economic coercion campaign against Lithuania since 2021 (over a dispute regarding Taiwan) as a case of informal application of secondary trade sanctions. In doing so, we offer three main contributions. First, we propose one of the first explicit models of supply chain secondary sanctions. Second, we enable descriptive inference, by gathering and presenting publicly available evidence from this prominent case. Third, we deploy the Lithuania case heuristically to theorize how the role of third-party firms introduces new dynamics that shape Chinese economic coercion.