Why the US should rely more on strategy, not sanctions

The legacy of slavery and racialization, the accumulated imbalance of powers between Congress and the executive branch, the coronavirus pandemic, and the return of great power conflict would seem to make the November election and the first 100 days of the next administration an inflection point for the United States, including its foreign policy. All demand strategy to advance our national interests — clear goal setting, policy determination, resource mobilization.

Absent war, foreign policy does not determine presidential elections. Voters still exercise benign neglect when it comes to the formulation and implementation of U.S. foreign policy. But issues with foreign nations do influence campaign contributions and candidates’ policy positions. Put another way, domestic political calculations play in the foreign policy space, notwithstanding Arthur Vandenberg’s Cold War admonition that “politics stops at the water’s edge.” And economic sanctions are the perfect instrument to take a stand unbound by the discipline of strategy.

The propagation and implementation of economic sanctions appears to have metastasized. Enabled by the global dollar trap, U.S. economic sanctions remain the congressional and/or executive default response, whatever the offense may be — nuclear proliferation, terrorism, tyranny, torture, territorial annexation, “active measures,” etc. 

Questions of costs versus benefits, actual objectives, unintended consequences and asymmetrical responses are given no shrift. Is Cuba still communist? Is Iran still ruled by its Supreme Leader? Is North Korea still advancing nuclear weapons? Does Russia still occupy Crimea, and pursue “active measures” in the U.S. and Europe? Will the People’s Republic of China stop mass detention of Uighurs, or its aggression against Hong Kong and Taiwan? Has Venezuela’s Maduro regime vacated Caracas? 

There are so many monsters to destroy. What, in fact, have sanctions targeting commerce deemed vital to rogue regimes’ survival achieved, besides strengthening the control of the incumbents over their respective populations and fostering commercial transactions outside the ambit of lawful, rule-bound international trade?

U.S. foreign policymaking has not been strategic because there has been no imperative.  Whatever adjective historians use to describe the U.S. invasion of Iraq, its regional consequences and the global war on terror, it will not be “strategic.” However, when it comes to relations with great powers, the common global threats of climate change, the global pandemic, and nuclear proliferation make strategic stabilization of U.S. foreign policy toward Russia and China imperative.

In the case of Russia, arms control is the primary locus to reboot U.S.-Russia diplomacy. And in the space of common threats, both countries as major global hydrocarbon producers must be engaged in addressing climate change. However, rigid congressionally mandated sanctions have created even more challenges and threats between the U.S. and Russia.

China, of course, is a different case, as the Thucydides trap and the degree of economic interpenetration of the U.S. and Chinese economies attest. That the Chinese economy will become larger than the U.S. economy is probable. That strong global alliances are imperative for the U.S. to achieve strategic stabilization with China is a stubborn fact.

In fact, U.S. economic sanctions have become impediments to actually conducting U.S. foreign policy strategically. They don’t work, their unilateral imposition alienates allies, and their second order effects increase incentives within the existing global financial system to construct alternatives to it.

This is not to argue that financial measures have no place in U.S. diplomacy as tactics, but rather that their deployment should be subordinated to strategic considerations and must be conducted by multilateral agreement among allies.   

As this point in the presidential election and congressional calendars, there are two things Congress can do to align financial coercive measures with great power strategy:

• Refrain from legislating further unilateral financial sanctions; and 
• Enact beneficial ownership disclosure legislation agreed to by the administration with Democratic and Republican members of the House and Senate as part of the “must pass” National Defense Authorization Act for fiscal year 2021. 

The first would contribute political space to recalibrate the place of financial measures in U.S. diplomacy; the second would redress a glaring gap in U.S. capacity to identify and seize laundered financial and material assets held within the U.S. by identified monsters. (The ability of foreign persons to use shell companies to hold wealth in the U.S. is a significant gap in U.S. anti-money laundering efforts.)

When the next administration takes office, the relevant House and Senate committees should engage in a joint, comprehensive effort to define U.S. great power strategy. The STRATEGIC Act recently introduced by Senate Foreign Relations Committee Chairman Jim Risch (R-Idaho) and co-sponsored by Sens. Mitt Romney (R-Utah), Cory Gardner (R-Colo.) and Todd Young (R-Ind.) maps out such an effort regarding China. 

In the next Congress, all committees of jurisdiction should focus on oversight of coordinated and coherent U.S. strategy toward Russia and China. This should include consideration of repeal of congressionally mandated unilateral sectoral sanctions in all non-military commercial sectors.

Executive use of financial sanctions should be conditioned on actual multilateral agreement with U.S. allies. In sum, U.S. diplomacy, and all assets subsumed in it, should be dictated by responsible, strategic statecraft.

Richard Sawaya is vice president of the National Foreign Trade Council. He is the director of USA*Engage, an advocacy coalition of businesses, agriculture groups and trade associations.