Let’s discuss a claim that sanction failures are due to a lack of political will.
Political Will
Brooks: “When someone tells you that sanctions can’t and won’t work, that’s basically pro-Russian propaganda. Are we seriously to believe that nothing can be done to stop the shameful flood of transshipments to Russia via Central Asia? Come on. This is just about a lack of political will.“
I am pretty sure that “someone” is me because we have gone round and round on this.
When someone tells you that sanctions do work. Ask them for evidence.
A Cynical Discussion
Other Replies to Brooks
My favorite reply to Brooks was: “Is this satire?”
A close runner-up is “You have no idea how trade works, do you?”
The unfortunate answers are No, and Yes, in that order.
Thanks to @USRoute41, @Grizzen13, @robin_j_brooks, @KoskovicsZ
Capital Flows
Point Worth Discussing
What About Time?
Thanks for an excellent question. Time is an excellent point worth discussing.
First, please note that we did not drive Castro out of Cuba, Maduro out of Venezuela, get Iran to back off nuclear weapons, or get Putin out of Ukraine.
Recent sanctions did drive China, Russia, and India closer together.
But we did impose short-term hardships on Russia. Russia had to develop new supply routes to India and China. That took time.
But ultimately, who suffered more, Russia or the EU?
And instead of western companies collecting insurance on tankers, Russia bought tankers from Greece. Brooks supported those insurance sanctions and now complains they are not working. What a hoot.
In the case of Iran, Trump’s own advisors and the EU said Iran was honoring the agreement. Trump tore the agreement up, imposed sanctions, and now Iran is close to building a nuclear weapon. Perhaps Iran already has.
The US put sanctions on China. So instead of China buying NVDIA chips, China has developed its own chip making capacity. Yep, China is still far behind, but is that a victory of sanctions? For how long?
When Trade Ends, Wars Start
One of the Three Reasons Japan Attacked Peal Harbor was the US cut off Japan’s access to oil and natural resources. War became inevitable. Japan chose to strike first.
The US and China are in a global trade war. And the EU is on the verge of joining that trade war, egged on by the US.
However, the end game is easy to spot. Either China will be successful at advanced chip production at a pace that satisfies China, or China will move to take Taiwan by force.
All It Takes
All it takes is the political will of: Brazil, India, Germany, Poland, Greece, the US, Dubai (on NVDIA access), Australia (on NVDIA access), Poland, Italy, Austria, Hungary, and Kyrgyzstan.
India and China also have to agree to pay higher than necessary prices for coal, natural gas, and oil.
Q: Is that all?
A: No
The EU is structured such that it takes unanimous agreement to enforce sanctions. So every county in the EU would have to have the “political will”.
To top it off, hard enforcement would be to the detriment of many of the above countries.
Thus, not only does Brooks fail to understand how trade works, he fails to understand how the EU works.
Sanctions Don’t Work Because They Create New Markets
September 19, 2023: Lesson of the Day: Sanctions Don’t Work Because They Create New Markets
A person who touted a buyer’s cartel sanction success, now complains the buyers cartel leaks like a sieve.
It seems we needed to review that.
September 4, 2023: US Sanctions Fail Again, China Now Produces Its Own Advanced Computer Chips
Trump and Biden both tried to cut off China’s supply of advanced microchips. So China is now producing its own.
Yep, China is still far behind. But we prodded China to makes its own chips and they are of increasingly good quality. That will take time.
December 29, 2023: How Russia Makes a Mockery of US Sanctions in One Picture
Unprecedented US and EU sanctions against Russia have had no impact on Russia’s oil exports or revenue. Who’s the beneficiary?
May 21, 2024: Another Sanction Failure: The US Blacklisted Xiaomi Three Years Ago Now it Makes EVs
Just three years ago, the Chinese company Xiaomi decided to build cars. It succeeded where Apple failed.
June 4, 2024: Chip Wars, China’s Goal Is to Cut Out the US
The US is restricting China’s access to advanced microchips. The US will regret the move in one of two ways. China will become self-reliant or there will be a real war.
June 11, 2024: Russia to Export Coal to India Via Iran. It’s a 4 Alarm Bells Fire
Hello sanction lovers. What are you going to do about this?
August 26, 2024: China Gains Secret Access to Nvdia Microchips by Renting Computers
The US has blocked export of Nvdia chips to China. But where there’s profit, there’s a way.
When Have Sanctions Ever Worked?
I cited Venezuela, Iran, Cuba, Russia, and China as examples of sanctions that failed.
I then asked Brooks for examples where sanctions achieved the political goals.
I am still waiting for a response from Brooks.
Synopsis
People like Robin Brooks sit in their ivory towers, with no understanding of how trade works, no understanding of how the EU functions, oblivious to the message of the recent Election in Brandenburg, oblivious to the message of the recent Elections in Thuringia and Saxony, oblivious to the message of the recent Election in France, oblivious to the reality that German Chancellor Olaf Scholz’s approval rating is a record low 18 percent (and why that is), then demand other countries pay a huge price when their leaders are getting booted for doing that, just to appease what Brooks in his ivory tower, at no cost to himself, thinks is fair, when citizens in the US would much rather money be spent here, and the overwhelming message from the EU is people are sick of the whole damn thing.
Dear Robin Brooks, thanks for inspiring the longest sentence I have ever written.
Now please study up on how trade works, how the EU functions (and doesn’t), and why sanctions don’t work. Then get the out of your ivory tower demanding others pay a huge price for your wishes when they, not you, are paying the price.
Thank You.
World trade create competitive markets and lower prices for everyone. We hate the bad actors, but more are helped than hurt if sanctions are not a weapon.
They don’t work if you mean the other side gives up and surrenders. They do make things more expensive, and hence more difficult. Wars are costly. Sanctions make them more so. Not perfect but less blood and gore. As for your Pearl Harbor analogy: Yes but there was the small problem of Japans conduct vis-a-vis China and Korea. You know the invasion, mass killings and so on. The US could have done nothing and ditto Britain when Germany invaded Poland.
The problem with the Ukraine is it is very corrupt but its defeat would probably encourage Putin to want more. It should have become a slightly more corrupt version of Switzerland. But thanks to Lindsey Graham and BoJo that went out the window. There are parts of the Ukraine that would rather be with Russia and they should be allowed to go. Parts don’t want to be and Putin shouldn’t be allowed to grab them. But to much ego is involved on both sides, so not a good sign.
In the case of Russia, the correct answer may well be that sanctions would be much more effective if MAGA wouldn’t act as Putin’s fifth column inside the U.S. Putin has now a significant chance that Trump will deliver Ukraine to him on a silver platter.
Blockades and sieges are much more effective than sanctions.
Which perhaps is why blockades are considered acts of war whereas sanctions are merely diplomatic annoyances.
Yes, lets unleash the trebuchets on Moscow! Pound the city into dust…
I have my true experience of how sanction works and is effective.
I am ordinary guy from Myanmar and working abroad.
25 years ago, US put sanction on Myanmar for some reasons.
One day I transferred money through bank and recipient didn’t receive money.
When I enquired it was because of US sanction on Myanmar and also cos of
similarity of my name and one of the ministers of my country.
There are many guys with similar names to the ministers and was very inconvenient.
You can imagine there are many unintended consequences of sanction.
Sanction on Russia, European, Japanese and Korean car co. left Russia.
Chinese car co. were happy and flood the Russian market with Chinese cars instantly. Also true of financial sector and others.
Europeans are suffering. German economy down turn is partly due to ?sanction.
Germany is certainly paying a lot more for its electricity and natural gas. Volkswagen is expected to start shutting down some of its German plants to cut costs.
The sanctions that Russia imposed on the West after 2014 were very effective, they caused the development of Russian agriculture, which managed to meet the country’s needs, and then to export massively. The sanctions imposed by the West against Russia were also beneficial, since they helped make the country much more self-sufficient.
Sanctions DO work but generally aren’t 100% effective due to the political structure of the world and the plethora of different priorities and interests within countries and the lack of any worldwide enforcement capability.
But let’s say sanctions only work 50% of the time, that is still 50% better than nothing.
After reading your post, I don’t see any alternative suggestions as to how to punish and impact politicians and the economies of target countries that you contend would work better than sanctions.
If we don’t exert political/economic control on bad world actors, such as Russia/Putin, then we are supporting a world where the weak will always be trampled by those with strength and size.
give me an example of a sanction that achieved its stated goal
It depends what country you sanction. For instance I would argue that the oil embargo by OPEC was very effective. Sanctions against 1st world countries tend to work because their population are not use to hardship. In the case of an oil embargo the US will put pressure on the president and congress to do something (including war) after all US citizens think that is their God given right to get cheap gas. So yes I think a full oil embargo against the west will topple governments.
OPEC oil embargo led to Iran-Iraq war sponsored by US, Saudi-US alliance, and some other adaptations, but it wasn’t at all effective at crippling the U.S. In what way would you describe it as effective?
Well, they work but not on the intended targets. There are so many accounts of sanctions backfiring. Recently, Russian sanctions have managed to bring China and Russia closer. Nixon’s efforts at separating them were just undone. It’s hilarious the stupidity of politicians.
Uh huh. Perhaps Mish should offer a service to politicians everywhere to tap the raw intelligence here that so many, such as yourself, claim to have of world events and macro economics (vis-a-vis government agencies and politicians)? Mish might make huge $$$!
Hey Jojo, Have you read History and Nixon’s epic travels to China? Or are you just spewing from a dirty orifice? Have you read the historic meeting between Putin and Xi Jinping regarding trade and mutual defense agreements? Maybe you should bone up on those subjects before being too critical.
I believe you are trying to make a point but I am unclear as to what it might be.
Mike, the better question, or to rephrase yours: give us examples of sanctions that EVER ACHIEVED THE GOALS OF THE SANCTIONING COUNTRIES.
Not having the time to research all the sanctions applied, I posed the question to Perplexity for a reasonable summary.
Again, something doesn’t have to work 100% to have impact on a country. Anything that makes them work harder to achieve a goal than they previously had to do in the past, takes away potential effort that might be applied somewhere else.
P.S. I wish you could add text highlighting and block quoting to posting tools here.
So they didn’t work as intended, but they sent a strong message. Awesome. There is a bevy of data and sound arguments above your post. Instead of waving it aside, perhaps you should read and consider them.
Here are some of the sanctions back-fired.
Financial sanction on Russia leads to de-dollarisation. Trump said if any countries not using dollar will be sanctioned and put on tariff of their products. Dollar, Euro, Yen are sole losers.Gold is the winner.
2.Western, Japanese, and Korean car companies left Russia resulting in flooding of Russian market with Chinese cars. They are the sole losers and China is winner.
Eg. Apartheid and genocide Israel government.
The Smoot-Hawley Tariff was passed by Congress in 1930. Its intent was to transfer the effects of the Depression from the US to the rest of the world. In Germany, the Nazi party gained in popularity as the German economy suffered. In 1931, a major European bank controlled by the Austrian branch of the Rothschild family failed in Vienna sending German unemployment up to 25%. German election results from 1928 to 1932 showed the growth of the Nazi party’s popularity as economic conditions deteriorated. Its percentage of the vote went from 2.6% of the vote in 1928 to 18.3% in 1930 to 33.1% in November 1932. The party won a plurality of the vote in both the July and November elections held in 1932 (from Wikipedia).
So it was not surprising to me that Germany’s AfD party grew in popularity in recent state elections in eastern Germany, as the German economy weakened. Volkswagen is expected to close some of its German plants for the first time in its history. My guess is that high electricity prices are hurting the company’s results. US/NATO sanctions have boomeranged to hurt Germany and probably the rest of NATO.
of course sanctions don’t work but they do create profit opportunities for the astute investor or the well connected player and perhaps that’s what the real whole point of sanctions are…..to give well positioned people an opportunity to make enormous amounts of money with political cover.
Sometimes you gotta look beyond the superficial circus show to understand whats really going on…..follow the money, I always do.
I actually agree with you here. Sanctions are like foreign aid – not ever particularly effective, except in creating opportunities for grift and rent-extraction by well-connected persons of corruption.
Europeons are the only people who do such stupid things as allow Somalis to move to Norway and Sweden. Even the Japanese (another American vassal) wouldn’t do that. The Scandinavians didn’t colonize Somalia but they still have some misplaced white guilt. Who the hell would look around Sweden and say “you know what this place needs? Somalis.” It’s the same eunuch mindset that leads the Europeons to joyfully adopt sanctions against Russia and shamefully tolerate the U.S. blowing up Nordstream. They willingly work against their own interests. Castrati. The rest of the world takes care of themselves – as they should.
I am starting to lean to the opinion it has a lot to do with liberal sisterhood.
On the war and peace side, the Scandinavians have woman defence ministers and oh so proud of it. They all proudly mouth BS promulgated by MSM propaganda departments.
True, but the men tolerate their bullshit. If there were a campaign to “cut off your balls for Ukraine” half of them would do it and then brag about it.
At the end of it, there will be a far fewer football hooligans and the like. No great loss to the human gene pool.
Football hooligans in Europe are usually right wing
Right, and some are keen to give their lives for Monsanto and hedge funds.
Monsanto/Bayer should sponsor a monument for them, call it the first monument to Dum Fux.
”
Who the hell would look around Sweden and say “you know what this place needs? Somalis.”
”
Anyone paying even the most cursory attention to the demographics of the “Women should be defense ministers instead of mothers” continent….
Somalia is darned near the country closest to Sweden where people still retain basic fertility.
Sanctions are like price controls – both are pushed by people that have no knowledge of psychology, math, economics or reality. Of course, if you disagree with the sanction and price control hucksters, you’re a racist, xenophobe, child endangerer and probably a Russian stooge.
The radical globalists devastated the midwest. Trump stopped them and stopped building a bridge to the world. The radical libertarian will get what they want : a smaller gov and less gov debt if we impose tariffs on industries that are important to our national security.
Mish, I love it when you “school” these idiots ! I’m always learning as well, thanks!
He’s a paid “shill.” He MIGHT be an idiot, but I rather think that his internal politics with his INSTITUTE will not allow it, right, MISH?
People & companies & countries violating sanctions are just criminals.
Should we just give up on all laws because someone, somewhere will break the laws anyway?
Germany especially, murders of six millions Jews, shouldn’t necessarily be trusted.
They should be forced to follow sanctions. You can bet the genocide going on in Ukraine doesn’t bother a lot of German businesses & they’d like to get back to trading with Russia asap.
That horrible guy named Germany really is mean, isn’t he? “We”, Idiots United, should “force” him and,like,Yeah!!
So the way to stop the genocide in Ukraine is to cut off funding and arms shipments to Ukraine and the Azov brigade as they try to ethnically cleanse those they regard as not Ukrainian and persecute those that follow the Russian Orthodox Church.
In the Soviet Union dollars were sanctioned for the general populace which then drove the dollar as preferred currency for the black market economy, which was huge, since the state run economy was a mess and insufficient to provide adequate consumer goods. Then the KGB realized that to get the dollars it needed to play around on the world stage, it had to become the mafia and was thus involved in illicit goods, prostitution etc. I think we have our own intel agency that has done similar things …
The Soviet Union used to have dollar (hard currency) stores which were reserved for foreign tourists as well as privileged Russians.
Yes. The dry champagne was excellent if they had it which was not often. They also sold Russian literature which was not in bookstores, like Tolstoy’s War and Peace. Bookstores had dusty treatises on dialectical materialism that no one read. A bottle of vodka in the trunk of a taxi after liquor stores closed was available for dollars, hence the black market. Just waive one down, if no vodka waive down the next one.
Sanctions don’t work, because everyone is looking to make a buck! Until people are willing to give up their perceived financial security, most will swim with the flow of cash.
This is why people caught countervailing sanctions should be put to death, quickly an din a public square, as an example.
How about Trump’s sanctions on Iran? Obviously didn’t stop all their hijinks, but my reading and memory say they had a major impact, and somewhat moderated Iran’s behavior in the Middle East.
I always enjoy reading your articles on trade. I know little about it, so appreciate the instruction.
How do you sanction a person?
Bar him from entry into your country.
Put him on the OFAC list with the government, and all banking transactions will be stopped through official channels.
Then again, to Mish’s point, that will create another underground movement of funds.
When President Trump created his banned list of certain Chinese companies listed on the NYSE, American investors were hurt financially when they were forced to dump their shares in the banned companies at distressed prices. I don’t know of any of the Chinese companies who suffered because they lost their American investors.
When you do business in the underground economy, you introduce friction and risk along with the possibility that you may lose some or all of the money you are transferring around in the form of Bitcoin or whatever..
Sanctions sometimes work, sometimes not. They clearly worked in the case of South Africa’s apartheid regime. They clearly worked in the case of Uzbekistan’s cotton harvest system involving forced labor. They didn’t work in the case of Iran (another one of Trump’s stupidities). And they are most likely not going to work in the case of China. Soon China may impose sanctions on us given that it seems to have reached the technology frontier in many areas.
Albert, sanctions “work” if: 1) The goal is to cause shortages. 2) Secondarily they will cause INFLATION. BUT, that assumes that sanctions work and so far, Russia as an example, they are selling Natgas and Oil to Europe in a round-about way. WAKE UP.
Agreed. Economic sanctions are usually not very effective. Sanctions tend to work best when the sanctioned country feels it’s becoming an international outcast and the cost of being an outcast are high (the cases of South Arica and Uzbekistan). Russia may be able to deal with the economic sanctions, but the cost of being an international outcast are quite high and rising. For example, Russian chess players couldn’t play at the chess Olympiad in Budapest, which seemed to have irked even Putin personally. Chess is still a big thing Russia.
If the best chess players in the world were not at that tournament it reduces those that won there to losers and the organisers to idiots.
The days of chess glory for Russia as a country are over. In fact nobody missed Russia in Budapest. One big reason is that Russian players themselves don’t want to play for an outcast country like Russia anymore.
They don’t have to work 100%. If they impact how a company or people do their business, making it more difficult (and in some cases, impossible) to do, then they can be judged successful.
IMO sanctions can only work if they are applied to a maximum from the get go (not gradual) and for a very short time (a year or less). Otherwise the one being sanction adapts and finds ways to avoid them.
I think they sorta worked on South Africa and Rhodesia but I also think it could be argued that they are in bad shape, almost to the point of thinking that racists did a better job generally. Life isn’t fair.
Please, no truths here are allowed, in replying to nincompoops.
Is “David Heartland” your new identify Brussels?
You guys love Russia so much, you should move there and live the dream!
Rogu, you’ve never been anywhere, I take it. Russia is fabulous. You are smoking the “AMERICA-IS-GREAT” good shit. You need to check into rehab, which, sorry to say, means a Brain Transplant.
“Russia is fabulous.”
The weather sucks.
Russia and Canada both cover such enormous areas of land. And still: Out of all that land, not a single corner of either, has weather nearly as nice as even the worst spot in the tiniest South Pacific micro state…. Talk about quality over quantity….
I’ve been to Russia. It’s a dump full of drunks, and it’s where comrades like you belong.
America: Love it or leave it, commies.
Sanctions are so stupid I won’t even talk about them here!
You did just do that. Just sayin’.
I will fill in the blanks: SANCTIONS ARE USELESS. THERE, done!
Well, Mish, you say that “the US cut off Japan’s access to oil and natural resources”, What? I believed that sanctions don’t work, that where there’s profit, there’s a way.
Did the US achieve its mission or cause Peal Harbor
Thanks to Pearl Harbor, we joined WWII and were able to help save the world from the Nazi’s.
Speaking of propaganda, Robin:
Is Ukraine still winning?
Ideally the sanctions offenders would be hanged by the neck until dead. Works every time. Garondamnteed.
Come on, get on with those hangings? OH, no? WHY?
Ten percent for the Big Guy.
Better – sit them on a pike and watch as gravity sloooooowly does its work.
The world would be infinitely better off if the idiots arbitrarily making up “sanctions”, as well as any other violation of universal freedoms, were hanged instead.
Now That!…. would be a boon to all and everyone.