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Report: Biden is rethinking the price of economic warfare

The administration may be overhauling punitive sanctions — but some countries will still be treated differently than others.

Analysis | Asia-Pacific

According to new reporting by the Wall Street Journal, the Biden administration aims to overhaul the use of punitive sanctions. Officials say that the administration wants to avoid broad-based sanctions, lessen humanitarian impacts, and work with allies instead of unilaterally. Bottom line: reverse Trump’s predilection for “maximum pressure” through economic warfare.

Plans for this new strategy come as the administration finalizes a broader review of U.S. sanctions policy, for which Treasury officials consulted with think tanks, NGOs, banks, and human rights organizations to reassess economic statecraft and devise ways to "promote a warranted, strategic, and judicious use of sanctions."

The administration has already signalled a more restrained approach by de-listing three former Iranian government officials and several energy companies in Iran, and offering  — jointly with Europeans — to lift sanctions on Iran as part of a re-entry to the JCPOA. The WSJ report suggests that we can expect Biden to ease more Trump-era sanctions in the coming months. 

This is a considerable shift from the previous administration's unfettered policy of maximum pressure blockades on Iran, North Korea, Venezuela, Syria, Nicaragua, and other adversaries. Former Trump officials have expressed opposition to Biden's new sanctions strategy, which they believe will require undue "policy compromises" and ultimately "empower" so-called bad actors. In a recent interview, former aide to John Bolton Richard Goldberg scorned the prospect of easing embargoes on Iran. He claimed that offering suchs relief would be "rewarding" and "legitimizing this regime and its bankrupt ideology." 

For far too long, this zero-sum mindset has plagued U.S. diplomacy and discouraged policymakers from significantly rethinking coercive measures. "This is a much-needed and overdue policy shift from the wrong-headed notion that the more punishing the sanctions, the better and quicker the target capitulates,"  sanctions expert George A. Lopez, who is a Non-Resident Fellow at the Quincy Institute and a UN practitioner, tells Responsible Statecraft. "No evidence supports that claim, nor that massive coercion on a society writ-large increases U.S. diplomatic leverage." 

The administration's new strategy, however, will likely only affect certain sanctions programs, while leaving others unchanged. In April, a senior official said that the administration fully intends on maintaining maximum pressure sanctions on North Korea for the time being. The administration has also shown continuity with Trump's policy toward Venezuela, as it has rejected Venezuela's pleas for sanctions relief and asserted that sanctions will not be eased unless Maduro paves the way for a political transition. So Biden’s moves away from broad-based sanctions should thus be viewed with cautious optimism. 

Of course, a serious overhaul of sanctions policy is impossible without congressional support. Congress has a habit of preferring broad-based sanctions over effective diplomacy. The Countering America's Adversaries Through Sanctions Act (CAATSA) of 2017, for instance, expanded sanctions on Iran, North Korea, and Russia and placed restrictions on the President's ability to lift or waive sanctions on Russia. Congress then crafted the Caesar Act of 2019, which expanded a sweeping blockade on Syria and has impeded the country's ability to rebuild its civilian infrastructure. Both of these laws prevent the United States from reaching diplomatic solutions and inflict mass suffering in targeted populations. As long as Congress continues to embrace and overuse broad-based blockades, Biden's policy changes cannot be fully realized. 

Time will tell whether the Biden administration will significantly pull back on the use of coercive measures and engage more productively with U.S. adversaries. The ongoing sanctions review is a welcome first step. 

Barinas, Venezuela, April 2018 (Shutterstock/Jhojan Lopex PH)
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