The United States has found itself entangled in a web of its own making—sanctions, the promoted instrument of its foreign policy, have become a double-edged sword and the sanction power is backfiring on the US.
In an effort to demonstrate its supremacy and advance its idea of world order, the U.S. has aggressively used sanctions against countries it considered challenging throughout the past few decades. As the dust settles, however, it becomes increasingly apparent that this love affair with punitive measures has been backfiring, causing severe collateral damage to the
American economy and undermining its standing on the international stage. The day is quickly approaching when we would witness a global summit at which the United States will be encircled by nations it once sought to punish with sanctions.
The US Treasury Department’s ever-expanding sanctions list, which now contains more than 9,000 entries, exemplifies the government’s way to misuse its punitive power to some extent. With sanctions applied to countries like Russia and Chinese companies, these two global powers have joined the club of U.S.-designated “bad boys,” alongside nations like Cuba, Iran, North Korea, Syria, and Venezuela.
As Washington’s adversaries celebrate their newfound unity, the United States is left to deal with the repercussions of its myopic policies. Yet, Washington, blinded by its own arrogance, has failed to recognize the upcoming threats and devastating costs these measures impose on international trade, businesses, and innocent civilians trapped in the crossfire.
A comprehensive network of sanctions
The magnitude of U.S. sanctions is astounding. According to a database maintained by Columbia University, six countries—Cuba, Iran, North Korea, Russia, Syria, and Venezuela—were subject to comprehensive U.S. sanctions, which prohibit the majority of commercial and financial transactions with entities and individuals in these nations.
Afghanistan, Belarus, the Democratic Republic of the Congo, Ethiopia, Iraq, Lebanon, Libya, Mali, Nicaragua, Sudan, and Yemen are subject to targeted sanctions, which prohibit financial and commercial relations with specific companies, individuals, and, in many cases, the government.
According to a database maintained by Princeton University, seven additional nations, including China, Eritrea, Haiti, and Sri Lanka, were subject to specific export controls. This already extensive list does not include targeted sanctions imposed on individuals and businesses in nations such as El Salvador, Guatemala, or Paraguay, or sanctions imposed on territories such as Hong Kong, the Balkans, or Ukraine’s Crimea, Donetsk, or Lugansk regions.
In 2021, the first year in office of U.S. President Joe Biden, his administration added 765 new sanctions designations to the list of 9,000, including 173 related to human rights. The combined GDP of these nations exceeds one-fifth of the global GDP, with China contributing 80 percent of that total.
Consequences of sanctions that are backfiring on the US
The repercussions of the United States’ preoccupation with sanctions are becoming increasingly apparent. Those nations that the United States intended to punish and isolate are innovating to weather the storm. Sanctions may appear to exert pressure on targeted nations, but they frequently result in unintended consequences that are detrimental to U.S. interests. For instance, secondary sanctions on the acquisition of distressed debt can deter Western investors, allowing U.S. adversaries to assume control of vital assets and resources.
Venezuela is an example of how U.S. sanctions may boomerang. The country’s default on its debt resulted in the transfer of debt ownership to unidentified investors, who are suspected to be intermediaries for China, Iran, Russia, and other adversaries. These new creditors could potentially undermine U.S. interests in the future renegotiation of Venezuela’s debt and the country’s return to financial markets.
The rising coalitions
An alliance of sanctioned governments is challenging the global financial system in response to the widespread application of U.S. sanctions. This coalition projects to end the dominance of the U.S. dollar and the Western financial system by promoting the adoption of alternative trading currencies, such as a BRICS (Brazil, Russia, India, China, and South Africa) currency. Even certain U.S. allies, such as India, hedge against the extraterritorial reach of U.S. sanctions which are backfiring on the US itself.
In addition, China’s prominence on the list of countries subject to U.S. sanctions presents a challenge. The Chinese Communist Party has positioned itself as an economic, diplomatic, and moral ally of the global south, thereby mitigating the effects of U.S. sanctions. China, unlike many other sanctioned nations, has the economic power and diplomatic clout to promote the international adoption of the Chinese Yuan and its financial schemes.
China is also a lucrative market for oil and gas exports from sanctioned nations such as Venezuela, Russia, and Iran. These redirected commercial markets may be inefficient and expensive, but they generate enough revenue to support the targeted governments.
Sanctions become counterproductive with invisible costs
Sanctions may be appealing due to their perceived low cost in comparison to military action, but their continued use without specific objectives and criteria for relief can lead to counterproductive results. Sanctions can lose their effectiveness and harm the global order they were designed to preserve.
Similar to sanctions, export controls on sensitive products can have negative effects, as evidenced by China’s response to such restrictions. A world in which sanctions and export controls are common interstate competition instruments risks undermining the global economy and impoverishing regions. In addition, the costs of sanctions are frequently undervalued and incurred by banks, businesses, civilians, and humanitarian organizations. Under repressive regimes, vulnerable populations can suffer the most from the effects of sanctions.
Despite the prevalence of sanctions, policymakers rarely consider their associated costs when implementing them. Sanctions are simple to impose, but difficult to lift politically and bureaucratically, even when they no longer serve U.S. interests. Ignoring the obvious drawbacks and unintended consequences, U.S. policymakers continue to advocate the use of sanctions as a universal instrument of statecraft. In addition, policymakers must be forthright about the intended purposes of sanctions and whether or not they have strengthened targeted regimes over time.
To conclude, this sobering reality has transformed America’s love affair with sanctions into a tragic saga of self-inflicted wounds. As long as it adheres to this preferred weapon, the United States risks sacrificing its economic prosperity, diplomatic influence, and moral standing on the international stage. The grand masquerade of sanctioned nations indicates, and the United States’ misguided policies may be the mask that ultimately slips, revealing the true cost of its misguided approach.
