There is no activity policymakers and lawmakers in Washington, DC enjoy more than enacting sanctions on the bad guys. If somebody, somewhere, is behaving in a less than ideal way or is challenging U.S. policy objectives, stepping up the sanctions pressure is likely the very first policy tool the U.S. government will reach for. The Trump administration has taken sanctions policy to the extreme; by the end of 2018, approximately 1,500 individuals and entities were included on the Specially Designated Nationals and Blocked Persons list, a significant increase over the previous year.
If used correctly, economic sanctions can be a powerful tool and coerce another country into changing its foreign policy in line with U.S. demands. Businesses are habitually conservative and risk-averse organizations, which means that the prospect of losing access to the U.S. financial system is more than enough incentive to cut ties with a sanctioned entity. We are currently seeing this play out with respect to Iran and Venezuela, both of which continue to lose foreign investors and business partners due to an increasingly entangled and complicated web of U.S. economic restrictions.
Sanctions, however, can also be overly seductive. Withholding somebody’s visa, freezing a company’s assets, and barring a government from transacting in U.S. dollars are a fast and easy way for members of Congress to demonstrate to their constituents that they are doing something about a problem. The temptation is equally strong in the executive branch, where issuing economic penalties is a relatively painless action for the U.S. government to take.
Yet because sanctions are so tempting, they become overused to the point where deliberations are trapped on auto-pilot. As Neil Bhayita and Edoardo Saravalle wrote in the Atlantic over a year ago, “The harder sanctions programs are to lift, the greater the chances are that they will become entrenched policy.” And when policy is entrenched, countries and businesses alike begin to adjust to the new reality, perhaps by using different currencies during their transactions or partnering with other governments that have an interest in defying them.