> Imagine if, say, A foreign electronics company is sanctioned by the government - does this mean that anyone who has previously worked with them or bought their electronics has done so illegally? If so, that sounds like a significant impediment to commerce, since nobody can predict who will be sanctioned in the future.

That's not what's happening here. What you're seeing is a US company evaluating its ongoing business relationships, and making the decision that continuing to associate with principals of a designated company isn't worth any potential legal risk.