The Skeptics

Inside Washington's Soft-Power Sanctions War

Congress voted to tighten economic sanctions against Russia. Embargoes once were imposed only occasionally and after serious debate. Today legislators and presidents think nothing of banning investment, trade and other contacts with foreign peoples and nations. They punish people and companies from other countries—such as Europe in the case of the anti-Russia legislation—for not following America’s rules.

Of course, sanctions are supposed to promote a good cause. But they most often hurt those with the least wealth, power and influence. Indeed, target governments often use U.S. economic controls for their own benefit, rationing money and goods to reward allies and punish adversaries. Only rarely do sanctions force political change, and that usually only happens if domestic factors already are favorable. In fact, people in targeted states often resent outside pressure. The routine use of sanctions—Washington hit thirty-six different countries between 1993 and 2000 alone—has made the United States an international bully.

Of course, American politicians rarely criticize this nation for its attempt to micromanage the globe. But they seem to see the issue with greater clarity when other countries do the sanctioning. In a recent speech before an Australian audience, Sen. John McCain said China was acting “more and more like a bully.” He had a lengthy bill of particulars, which included “refusing to open more of its economy so that foreign businesses can compete fairly.” That seems to characterize the Trump administration’s attitude toward international commerce and “using its trade and investment as tools to coerce” neighbors, which he has routinely supported doing on Capitol Hill.

For McCain, the irony was unintended. Yes, the People’s Republic of China recently cut tourism, encouraged consumer boycotts, and targeted South Korean businesses and performers as retaliation for Seoul’s participation in the THAAD missile defense system. The PRC also restricted commerce with North Korea, in response to UN sanctions and U.S. pressure, though not nearly enough, according to the latest presidential Twitter blast. But sanctions are a rare tactic by China. Beijing rarely limits economics for politics, but Washington has no problem using that tactic.

For years American officials have enthusiastically engaged in global-social engineering. If foreigners won’t listen to the United States, which is most of the time, then coercion is needed. And that usually starts with some form of economic sanctions.

Unfortunately, American policymakers usually act reflexively, out of moral anger rather than as part of a thoughtful, realistic foreign-policy strategy. Siamack Shojai and Patricia S. Root of Central Connecticut State University have noted that “sanctions are imposed regardless of existence of favorable or unfavorable conditions and structures.” Economic interests, activist groups and grandstanding politicians all too often are unable to resist the temptation to “do something,” even if doing so is counterproductive.

Alas, little good results from such efforts. America possesses the world’s largest economy, but enjoys few monopolies. In many cases a U.S. embargo merely changes market shares and shifts commercial patterns a bit, inflicting little, if any, punishment on anyone other than American citizens.

Andrea Klestadt of the National Customs Brokers & Forwarders Association of America has argued that “overall U.S. embargoes are not effective in promoting meaningful foreign-policy changes and frequently are counterproductive. In many of the cases considered by advocates of sanctions to be successes, other factors . . . were at play that may have had far more influence than the actual embargo.” In 1992 the U.S. General Accounting Office concluded that sanctions appeared to be most “successful in achieving the less ambitious and often unarticulated goals” of punishing behavior that violated international norms and discouraging future misbehavior, but were “usually less successful in achieving the most prominently stated goal of making the target country comply with the sanctioning nation’s stated wishes. Thus, excessive expectations are often formed about what sanctions can achieve.”

The Peterson Institute for International Economics reviewed 115 cases between World War I and 1990, and concluded that in about a third of the cases the United States had at least partial success. But the success rate dropped significantly during the 1970s and 1980s, to just a fifth of the cases. Also, during the latter period, only 13 percent of the time were unilateral sanctions by Washington successful to any degree.

In general, economic penalties are most likely to work if the target is limited, they are multilateral, their objectives are modest, the economic disparity is great, previous economic ties are significant, and costs are low for the sanctioning state—which isn’t often.