Navigating the Web of US Sanctions: Implications and Strategies in Global Diplomacy and Economics

May 13, 2024 - 08:59
Navigating the Web of US Sanctions: Implications and Strategies in Global Diplomacy and Economics


By: H. Zaïm-Bashi


For decades, sanctions have stood as the cornerstone of US foreign policy, wielding immense influence on nations worldwide. A comprehensive database compiled by Columbia University reveals a litany of countries ensnared in the web of US sanctions, from Cuba and North Korea to Russia, Syria, and Venezuela. These measures, ranging from targeted to comprehensive, impose severe restrictions on business and financial dealings with entities and individuals in the sanctioned nations, under the purview of US law.


Delving deeper into the labyrinth of US-imposed sanctions, an additional 17 countries, including Afghanistan, Belarus, and Yemen, find themselves subject to targeted sanctions, honing in on specific financial and business ties with entities deemed off-limits by US legislation. The intricate tapestry of sanctions extends further, encompassing nations like China, Eritrea, and Sri Lanka, subject to specific export controls, as per the Princeton University database. Not to be overlooked are the targeted sanctions on individuals and businesses in countries such as El Salvador, Guatemala, and Paraguay, along with sanctions on territories like Hong Kong and Ukraine's Crimea, Donetsk, and Luhansk regions.


By the year 2021, the United States had sanctioned over 9,000 individuals, companies, and sectors of target countries' economies, as reported by the US Treasury Department. In President Joe Biden's inaugural year, 2021 witnessed the addition of 765 new sanctions globally, including 173 with a human rights focus. Collectively, nations under the umbrella of various US sanctions represent more than a fifth of the global GDP, with China commanding a staggering 80% share within this cohort.


The ramifications of this embargo-centric policy reverberate across the economic and diplomatic spheres, posing formidable challenges for Washington on the global stage. The effects are manifold, ranging from dwindling exports and retaliatory sanctions to strained diplomatic ties and escalating political tensions between nations.


Negative Impact on Exports: A Strain on American Competitiveness


American businesses find themselves grappling with the repercussions of even limited US sanctions, which have precipitated export hurdles and delayed shipments, tarnishing the reputation of US-based companies as reliable trade partners. This erosion of trust threatens to erode the competitive edge of US firms over time, compelling buyers to seek alternative sources untethered to the political whims of their respective nations.


De-dollarization: The Unraveling of Dollar Dominance


A looming challenge highlighted by the US Treasury Department is the waning global reliance on the US dollar, coupled with the burgeoning popularity of cryptocurrencies. While the greenback retains its preeminent status among world currencies, concerns loom over its enduring economic and financial credibility in the face of shifting tides. The dollar's historic role as the world's reserve currency since World War II faces scrutiny, particularly in the aftermath of sweeping sanctions isolating Russia from the US-dominated global financial system, prompting nations to explore backup currencies for trade transactions.


Emerging Alliances: The Evolution of Strategic Partnerships


America's embargo policy has spurred nations in regions like Central Asia and the Caucasus to pivot towards Russia in search of alternative export routes, a stark reversal from previous efforts to supplant Russian influence. Similarly, Arab nations in the Persian Gulf region have grappled with the quest for alternative avenues post-sanctions on Iran, underscoring the challenges of finding viable channels for oil and gas exports. The policy of American sanctions has catalyzed a burgeoning desire for regional alliances as nations seek to navigate the shifting geopolitical landscape.


In conclusion, the linchpin of the United States’ economic supremacy lies in the dominance of the dollar, a strategic advantage wielded to shape global trade dynamics and financial systems through domestic policies. The imperative to counter this policy lies in discrediting the dollar as an international currency, fostering economic interactions utilizing national currencies, and eschewing interference in cross-border transactions. The establishment of the Sanctioned Countries Assembly emerges as a potential solution to navigate US sanctions, with nations like Iran, Russia, and China poised to form the nucleus of this coalition. The adverse repercussions of the embargo policy, acknowledged even by Americans themselves, underscore the enduring and far-reaching implications for the American economy, necessitating a recalibration of strategies in the evolving global economic landscape.