Unilateral Sanctions: An Inconvenient Truth

Fun but uncomfortable fact: unilateral sanctions seldom work.

Let’s take a look at a few examples, and why Washington’s use of them may be eroding its global position.

Going back to the 19th-century, Germany expelling the purchasing of Russian bonds to undercut the Slavic empire didn’t work. The French took up the slack and gave Russia a financial lifeline.

In the 20th-century, West Germany imposed a grain embargo against the Soviets in the 1960’s unless they dismantled the Berlin Wall. The concrete barrier stood erect for another ~30 years.

In the 21st-century, the US reimposed sanctions against Iran. The result? It emboldened the hardliners and pushed Tehran closer to Moscow and Beijing geopolitically and economically.

The sanctions against Russia in the Ukraine War produced a similar outcome: it pushed Russia further into China’s orbit and strengthened Beijing’s regionalization strategy.

Washington has “weaponized interdependence” by leveraging US Dollar’s centrality in the global financial system to alter the behavior of its targets. The problem with this method is it reflects the law of diminishing returns.

The more the US pushes countries out of the USD-centric global system, the more it inspires collaboration for non-dollar alternatives. BRICS and a plethora of organizations and countries in Asia, Latin America, and Africa are accelerating the momentum of de-dollarization.