The sanctions which followed the 2022 Russian invasion of Ukraine generated a large trade shock for firms trading with Russia. This column examines the short-run response of firms in Latvia – a small open economy with strong pre-war trade ties with Russia. The author finds that firms with lower initial exposure to Russia were the most likely to sever trade ties. Only a small set of the most exposed firms suffered significant losses in turnover, employment, and profitability. As sanctions become