Perspective: Economic sanctionsTrump’s Use of Sanctions Is Nothing Like Obama’s

Two and a half years into Donald Trump’s presidency, there is no doubt that economic sanctions are his administration’s foreign-policy weapon of choice. From China to Iran to Venezuela, sanctions and other coercive economic tools are central to Trump’s maximum pressure campaigns against U.S. adversaries. But he is not only rolling out sanctions more aggressively than his predecessors: He is also using them in new ways.

Peter E. Harrell writes in Foreign Policy that a close examination of the administration’s use of sanctions reveals three broad trends and raises important questions about the future of U.S. coercive economic statecraft:

The first trend is an unprecedented level of aggressiveness. Data compiled by the law firm Gibson, Dunn & Crutcher shows that in 2018 the United States added nearly 1,500 people, companies, and entities to Treasury Department-managed sanctions, nearly 50 percent more than in the second-highest year on record—2017, also under Trump.

The second trend is Trump’s increased focus on political and diplomatic signaling surrounding U.S. sanctions. The United States, of course, has long articulated policy rationale when imposing new sanctions on foreign countries. When the Obama administration placed sanctions on Russia in 2014, we publicly and privately communicated to Moscow that sanctions could be lifted if it implemented the so-called Minsk peace agreement between Ukraine and Russia. Sanctioned companies and individuals have always had the ability to quietly petition U.S. regulators to have themselves removed from sanctions lists if they cease their malign activities, meaning companies can get their assets unfrozen and resume business with the United States.

The third trend is the growing use of coercive economic measures other than sanctions. In Trump’s efforts against Chinese companies including Huawei, ZTE, and several supercomputing firms, Trump has relied on targeted export controls as a coercive tool, rather than Treasury Department sanctions. This allows the United States to impose costs on targets while minimizing the collateral costs to global markets that would have arisen if, for example, it put Huawei on U.S. sanctions lists.

For the United States, the most important question regarding Trump’s sanctions is whether they work to advance U.S. national security interests. Harrell notes that the record so far is mixed, but he says that the administration should be aware of two things:

First, “Trump’s aggressive use of sanctions… has given rise to a growing geopolitical backlash that brings new risks to their effectiveness over the long-term. The European Union, China, and other major countries are increasing their efforts to develop financial and trade channels insulated from U.S. economic pressure.:

Second, “Perhaps more importantly, Trump must recognize that when it comes to measures targeting countries (as opposed to measures targeting individuals and companies), excessive demands can encourage them to dig in and refuse to make concessions despite draconian economic costs. Iran, for example, is unlikely to ever agree to Pompeo’s 12 demands, and in recent months it has responded to U.S. pressure by escalating attacks of its own to create negotiating leverage. Pyongyang has so far rebuffed Washington’s demands for complete, verifiable, and irreversible denuclearization and has resumed testing missiles in advance of potential further diplomatic negotiations. Maduro clings to power in Caracas even in the face of a projected 25 percent decline in GDP this year, due largely to U.S. sanctions.”

The use of economic sanctions as a policy tool should be informed by history. “Studies of sanctions suggest that they are successful in causing regime change or other major policy changes only about one-third of the time.” Harrell writes. “Regimes have historically shown a significant capacity to dig in and resist economic pressure while letting their people suffer if they deem it necessary for regime survival.”