If there is one thing the majority of policymakers in Washington can agree on, it’s that slapping sanctions on misbehaving foreign actors is a no-brainer. Designating a foreign individual, corporation, or entity for economic sanctions is a seemingly weekly occurrence, something so regular that you could accurately call it a ritual. In 2019 alone, the Trump administration designated 785 entities for sanctions, all of which were crafted to send a message that running afoul of our foreign policy has serious consequences for their wallets.
This trend has accelerated over the last several weeks. Washington is running a number of maximum pressure sanctions campaigns, with Iran and Venezuela two of the most prominent. The economies of both are in dire straits. Iran’s crude oil exports in April could have been as low as 70,000 barrels a day, a stark 97% decrease from the 2.5 million barrels per day Tehran exported two years prior. In part due to shoddy management of its own resources and to the punitive impact of U.S. oil sanctions, Venezuela is so desperate for gasoline that the Maduro regime is digging into its gold reserves to pay Tehran for energy and technicians.
The Trump administration and lawmakers on Capitol Hill are already dusting off the U.S. sanctions blueprint to penalize Beijing for ramming through a national security law pertaining to Hong Kong. As President Trump announced at the White House on Friday, the administration is now reassessing Hong Kong’s status as autonomous from the Chinese mainland — a process that could plausibly conclude in the revocation of the city’s separate trade arrangements with Washington.
That U.S. sanctions will have a negative financial impact on the target is hardly a surprise. The international financial system, after all, is based on the U.S. dollar for transactions. This provides Washington with a tremendous amount of influence. Sometimes the mere threat of freezing an individual’s assets in U.S. jurisdictions or blocking a company from accessing the U.S. financial system is enough to deter bad behavior. According to a report in the Wall Street Journal, U.S. officials successfully convinced two Greek-owned cargo vessels to break away from a Venezuela-bound flotilla by issuing precisely those kinds of warnings.
Sanctions, however, are not a one-size-fits-all solution to all of the world’s problems.
If they aren’t coupled with a realistic policy objective or a diplomatic off-ramp that allows the targeted government to save face and settle the dispute, sanctions very often have the opposite effect of worsening the situation by empowering hardliners, disenfranchising moderate elements who are open-minded about compromising, and gifting the country a convenient excuse to double down on past bad behavior.
If this story sounds familiar, it’s because Iran is doing exactly that — despite a maximum pressure campaign that is tanking the Iranian economy, Tehran is tripling its stockpile of enriched uranium, researching the development of more sophisticated centrifuges, enhancing the quality of its enriched uranium, and challenging U.S. military forces in the Middle East through its proxies.
Sanctions policy should not be measured on how much cash a foreign government loses, but whether that foreign government’s behavior has changed in line with U.S. foreign policy preferences. By that measurement, sanctions aren’t worth the hype — nor have they succeeded in inducing the policy change Washington demands. The record is clear: Iran is meeting maximum pressure with maximum resistance; Maduro has consolidated authority in Caracas; Russia continues to support separatists in eastern Ukraine and hack U.S. email accounts; China is well on its way to eliminating Hong Kong’s autonomy; and North Korea today is as interested in denuclearizing as it was a year ago (which is to say, it isn’t interested at all).
U.S. financial power is second to none. But if Washington continues to overuse the sanctions tool on a growing array of foreign targets and naively believes adversaries and competitors will meekly surrender their own interests for a payday, U.S. foreign policy will continue to be anemic and ineffective.
Daniel DePetris (@DanDePetris) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a fellow at Defense Priorities.
