I kind of wonder if the Internationale seemingly not trading a lot with other countries has more to do with ideology than any sort of embargo.
If unions really are in control and they're pushing very worker friendly policies, it's likely that their goods/services are significantly more expensive than places that don't have such worker friendly policies. That would make it difficult to export large amounts of goods/services, and imports would likely have to be controlled as well lest cheaper foreign goods undercut the domestic market.
That's kind of always been my headcanon for why the Syndies aren't affected by Black Monday, they're already as close to an autarky as they can physically manage and so protectionist they'd make a Junker blush.
It also puts another spin on why they're so desperate for world revolution, they quite literally cannot afford to have any major country not doing things the same way they do.
No wonder France attacks Germany even if you give them Alsace-Lorraine back.
Frankly, no.
It's been proven good labour regulations improve productivity. And yeah, the internationale is probably against delocalization and similar stuff... But that just wasn't a problem in the WW2 era. It's a much younger issue. The rest of the world isn't industrialized enough to undercut them. Most industry is still located in the few rich developed countries.
I do agree they would try for autarky when possible, but mostly because they don't want to feed their enemies if avoidable.
Of course, if they win the war, this will become a question, especially if the Indian syndicalists win and start industrializing. But in the second weltkrieg? Nah probably too early.