What would be better is that stopping trade with that nation also hits your diplomatic relations with whoever they're trading with. Historically the British Empire had to make a pre-emptive strike against Denmark in 1801, in order to ensure the League of Armed Neutrality didn't manage to get its fleet together to forcibly break the Royal Navy blockade on France that was messing with their trade to France.

You shouldn't just be able to hack off all trade at the balls without annoying everyone else who was making money from it.