Between Power and Promise: The Evolution of U.S. Sanctions Strategy

In recent years, sanctions have become the go-to instrument of statecraft, reflecting a global shift toward economic coercion amidst geopolitical tensions. This trend shows no sign of stopping, as the Trump administration’s tariff policies reshape global trade dynamics, its Venezuela’s sanctions regime tightens further, and the world reckons with the question of stopping Iranian proliferation and retaliation following U.S. and Israeli strikes on Iranian nuclear installations. The United States and its broader coalition of allies and partners may wish to look back on the efficacy of their past sanctions regimes for inspiration in the face of today’s challenges, but looking back over the past several decades of U.S. and allied sanctions raises real questions about the evolving role, effectiveness, and best application of this particular tool of economic statecraft.

The Russian invasion of Ukraine in 2022, and the ensuing sweeping sanctions, supported by a uniquely wide coalition, marked an inflection point of this expanded U.S. approach to sanctions, part of the growing assortment of economic statecraft levers embraced by both the Trump and Biden administrations. The U.S.-led sanctions against Russia were intended to cripple Moscow economically, forcing an end to the latest round of aggression. Despite the unprecedented scale and coordination of sanctions, the war persists, prompting renewed debate about whether sanctions can achieve their intended policy outcomes.

A Brief History of Sanctions

Historically, sanctions emerged from the optimistic yet ultimately ineffective efforts of the League of Nations to achieve collective security. During the Cold War, nuclear deterrence arguably encouraged economic pressure over military conflict, embedding sanctions as a popular tool for policymakers (particularly when facing domestic political pressure to “do something”) given the costs of conventional military action in terms of both blood and treasure. But the lack of connectivity between the Soviet Union and the United States limited the effects of the superpowers’ mutual export control and sanction regimes, and ultimately, they did not halt Soviet progress on key military technologies, such as quieter attack submarines.

Today’s interconnected global economy further amplifies the power and appeal of sanctions regimes—as well as vulnerabilities and challenges—of sanctions. Indeed, even smaller states can now wield significant influence by controlling vital links in global supply chains—as the recent Israel-Iran crisis made clear amid handwringing surrounding the potential closing of the Strait of Hormuz to oil transshipment and the effect of this action on the global economy.

Recent U.S. actions reflect a desire to leverage sanctions in the context of geopolitical competition, notably targeting Chinese entities under accusations ranging from human rights abuses in Xinjiang to military tensions in the South China Sea. Unlike traditional tariffs aimed primarily at economic protection or punishment for unwanted actions, these sanctions explicitly serve broader strategic objectives: undermining an adversary’s economic and technological capabilities by exploiting legal justifications such as intellectual property violations, human rights, or national security threats. This approach, visible in restrictions placed on companies like Huawei, signals a shift toward targeted economic statecraft as a frontline tactic in great power competition.

Enforcement and an Implicit Promise

The efficacy of sanctions, however, hinges upon specific conditions: either broad international backing or market dominance (the absence of an option to exit), asymmetry in economic terms favoring the sender, precise implementation, and clear, achievable policy objectives alongside an implicit promise that when these sanctions achieve their desired effect, the sender will take their foot off of the proverbial neck.

This latter, implicit promise of forbearance is a key aspect of our argument in our recent chapter. The recent case of U.S.-led sanctions against Russia underscores these complexities. While some sectors, like aviation and artificial intelligence (AI), have been severely impacted, Western sanctions—particularly the exclusion of Russian banks from the SWIFT international payments system and targeted actions against Kremlin-linked elites—have inflicted economic pain but failed to decisively alter Moscow’s calculus. Russia’s resilience highlights a key challenge: enforcement, particularly when sanctions evasion is facilitated by geopolitical alliances. Partnerships with China, North Korea, and Iran have provided Russia with alternative markets and imports, significantly undermining Western objectives.

The Iranian case is emblematic of the challenge of convincing the target state of the implicit promise outlined above. Previous sanctions successfully pressured Tehran to negotiate the 2015 nuclear deal, but the Trump administration’s 2018 withdrawal demonstrated how the shifting goalposts of subsequent administrations undermine trust in any agreement moving forward. Iran is a country with few friends and even fewer friends interested in seeing the development of Iranian nuclear weapons. As the United States moves forward following its strikes on Iran’s declared nuclear sites at Natanz, Isfahan, and Fordow, sanctions will undoubtedly continue to be a part of its strategy to restrict Iranian proliferation. Whether these sanctions are sufficient for achieving those goals remains unclear, no less because clarity regarding sanctions relief upon compliance remains crucial yet uncertain.

It is also worth noting that sanctions invariably trigger unintended consequences, including impacts on civilian populations, private sector firms, and allied economies. Europe’s ongoing energy crisis, exacerbated by sanctions against Russia, illustrates this collateral damage. These spillovers complicate political support for prolonged sanctions, raising questions about their sustainability.

Sanctions and the Technological Frontier

Today, as sanctions and export controls target technological capabilities, the U.S. private sector has found itself in the role of enforcing and suffering the spillover effects noted above, while the U.S. government has to reckon with private-public cooperation as an additional, less predictable, ingredient for successful economic statecraft. For example, the now revoked AI diffusion rule, which, though an export control regime, was sanction like in that it banned the sales of advanced AI chips to China, Iran, North Korea, Burma, Syria, and Venezuela, was poorly received in private industry leading to their successful lobbying to repeal the rule.

In conclusion, current geopolitical events underscore both the strategic value and limitations of sanctions. Their success depends on clear objectives, robust international cooperation, and careful management of unintended outcomes. As the global landscape shifts further toward economic statecraft amid escalating strategic competition, especially involving China, Iran, and Venezuela, policymakers must recognize that the power of sanctions lies not merely in their imposition, but in their credible promise of relief upon behavioral change—a promise that, historically, has proven challenging to uphold.

Andrew W. Reddie is an associate research professor of public policy at UC Berkeley and the faculty director of the Berkeley Risk and Security Laboratory. Leah P. Walker is the executive director of the Berkeley Risk and Security Laboratory, UC Berkeley.

Thumbnail credit: Joe Catron (Flickr)