Please consider Biden to Temper U.S. Use of Sanctions Weapons, Officials Say by WSJ writer Ian Talley.
The administration has nearly completed an extensive review of U.S. sanctions policy, which is expected out near the end of summer, according to one official. While details are still being ironed out, Biden administration officials have foreshadowed elements of the new strategy in a series of actions, including the planned easing of economywide sanctions against Iran.
The policy overhaul sets up a sharp departure from the Trump administration, which imposed sanctions as a foreign policy tool more frequently than previous U.S. administrations to target broad sectors of the economy in Iran, North Korea, Venezuela and elsewhere in an effort to exert economic pressure against adversaries.
With that bit of background, let’s go over some of Talley’s thoughts as well as Talley’s quotes of others, point-by-point.
Talley: The sanctions efforts succeeded in helping push Iran and Venezuela into economic contractions and severing North Korea’s ties to global financial and trade networks, achieving short-term goals.
Mish: It’s absurd to have short-term “goals” of forcing forcing countries into severe economic contractions. Such actions punish millions of innocent civilians, many of whom die from starvation or in hospitals due to inability to get medicine and equipment.
Talley: However, the U.S. pressure didn’t produce major new diplomatic agreements or substantive changes in the conduct of adversaries, leading to questions about their value as a stand-alone tool.
Mish: Bingo. Since it did not result in policy change but did result in pushing Venezuela and Iran closer to Russia, the only correct way to look at Trump’s sanctions is total failure.
Talley: Former Trump administration officials say the Biden administration is wasting diplomatic leverage built over the last four years—especially regarding Iran’s nuclear program—by easing sanctions without sufficient commitments from Tehran and other governments.
Mish: What leverage is that? What did Trump succeed in doing other than splitting allies and further radicalizing Iran?
Talley: By seeking to rejoin the nuclear deal and repeal the sanctions, for example, “the Biden administration is about to empower the world’s foremost state sponsor of terrorism again,” Mike Pompeo, secretary of state under Mr. Trump, said in June.
Mish: Nothing is more annoying that warmongers like Pompeo. He and his ilk have failed at every Mideast policy for something like forever. The fact is, Iran was honoring the terms of the agreement with Iran, the US state department under Trump admitted that, and so did US allies. Trump said he could get a better deal via sanctions. He failed miserably.
Talley: “Our focus is on making sure that we’re moving from unilateral action, which has been what has defined U.S. policy over the last four years, to really working with our partners,” a senior administration official told The Wall Street Journal.
Mish: It is important to look at things issue by issue. Give Biden a positive score for this one.
Talley: Former President Donald Trump’s exit from the accord in 2017 and subsequent imposition of an economywide pressure campaign against Iran was criticized by some of Washington’s trans-Atlantic partners. The Biden administration’s removal of several former Iranian government officials from its blacklists in recent weeks spurred criticism that it is rushing to dismantle sanctions being used to pressure Tehran.
Mish: OK, there was pressure. Did it work? Ever? Where?
Talley: The Biden administration also has sought to collaborate with allies on sanctions against China for human-rights abuses in Hong Kong and in its western provinces, against Russian officials for attacks on political opponents and dissidents, and blacklisting Belarus officials for escalating political repression.
Mish: Do sanctions work, or don’t they? It’s clear they don’t. But the fewer of them the better and requiring cooperation is a means of getting fewer of them as well as better targeted ones that do not punish citizens.
Talley: In May, German officials were buoyed by the U.S. decision not to sanction Nord Stream 2, the multibillion-dollar natural gas pipeline being built by European and Russian companies.
Mish: For starters, the pipeline was 98% completed. In other words, Trump failed. Biden was not going to halt the pipeline either, so why continue ridiculous sanctions doomed to fail and indeed already had failed.
Talley: The pipeline decision drew criticism from Republican and Democratic lawmakers who said it bolstered Moscow’s strategic foothold in Europe, while some former U.S. officials said it helped cultivate the diplomatic capital the Biden administration needs to secure European support for joint action against Russia and China.
Mish: Criticism came from those who cannot see failed sanction policy if it spit in their faces (which it did). As noted above the pipeline was going in anyway. And Ironically, the sanctions forced the pipeline to be completed with Russian labor and Russian supplies, not EU labor and supplies. Effectively, Russia was the primary beneficiary of Trump’s sanctions! What a hoot.
Talley: Last month, the administration issued new waivers meant to spur the flow of pandemic-related aid to Venezuela, Syria and Iran, addressing a key concern among humanitarian groups that said U.S. sanction regimes were inadvertently hurting local communities.
Mish: That’s a start.
Reflections On Going Alone
There are few if any major instances where sanctions ever achieved anything useful. I am not aware of any. If someone can find one, please send it my way.
And in cases where one country goes alone on policy, as Trump did on numerous occasions, the most likely result has been deeply negative results.
Trump failed miserably in Iran, raised considerable discord with EU and other allies in doing so. In the process he raised tensions in the Mideast and drove Iran into the hands of China and Russia, both of whom worked with Iran to get around US sanctions.
Iran backfired, Venezuela backfired, and Russia pipeline sanctions backfired.
Europe is Europe’s business. Perhaps the EU and Germany made a mistake. But it was their mistake to make not ours to demand the EU buy US Liquid Natural Gas.
Trump was correct to express an opinion. It was foolish for him to think sanctions would halt the pipeline against German Chancellor Angela Merkel’s wishes.
What About Tariffs?
Biden needs to go beyond sanctions to another failed US policy tool, that being tariffs.
Biden not only extended Trump’s tariffs on Canadian lumber, he upped the tariffs when lumber prices were already through the roof.
Tariffs don’t work either. Trump proved that in spades.
Although Biden is better than Trump on tariffs, especially regarding the EU, he is still light years away from correct policy.
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