The Angell Paradox is a destruction of trust

The Angell Paradox can be roughly stated to say that when powerful countries with commercial trade impose tariffs or sanctions, they often hurt themselves more than they hurt others. This is because their tariffs or sanctions undermine the legal certainty needed for trade and countries now need to discount the value of trade with the risk of expropriation. An agreement made today with a firm in one country to sell $100 of goods might be taxed or completely banned tomorrow making that agreement worth significantly less than $100 or perhaps nothing at all.

Economically, the effect of punitive tariffs or sanctions on the sanctioning country is indistinguishable from the effect of contracting with an untrustworthy party. If Lying Lucy promises to buy $100 of Alice's apples, one needs to discount the value of the agreement by the risk that Lying Lucy doesn't do what she says. If Trustworthy Tommy, makes the same promise to buy apples from Alice but Trustworthy Tommy lives in the Sanctioning States of Tariffia, one must likewise discount the agreement based on the risk that the nation in which Tommy lives prevents him from fulfilling his side of the deal. Sanctions levied on the country in which Trustworthy Tommy lives have the effect of making Tommy not very trustworthy to his global trading partners.