31
Mar

Economic sanctions have become the “silver bullet” of American foreign policy over the past decade, because they’re cheaper and more effective in compelling adversaries than traditional military power. But Treasury Secretary Jack Lew warns of a “risk of overuse” that could neuter the sanctions weapon and harm America.

Lew made his unusual case against “sanctions overreach” in an interview last week and in a speech prepared for the Carnegie Endowment for International Peace. His caution against overuse comes as some Republican members of Congress are fighting to maintain U.S. sanctions on the Iranian nuclear program, despite last year’s deal limiting that Iranian threat.

By highlighting the strengths and weaknesses of sanctions, Lew is raising an important question about the nature of American power in the 21st century. Sanctions have clout because U.S. financial markets are the central nervous system of the globalized economy. But if so many sanctions are applied that the U.S. system becomes too complicated and cumbersome for foreigners, they will eventually find ways to do business outside U.S. markets — weakening both our sanctions and our underlying economy. The magic bullet will become a poison pill.

Lew notes that U.S. sanctions against Iran’s nuclear program showed how effective this weapon can be when it’s carefully fashioned as part of a broad coalition. America’s program of so-called “secondary” sanctions didn’t just ban U.S. companies from doing business with Iran; they banned any company operating in Iran from using U.S. banks or other financial institutions. That made Iran a no-go zone for most Western companies. Read more…

 

Published in the nyt.com

Opinion writer March 29

 

 

Contrast the success of this coordinated effort in bringing Iran to the table with five decades of unilateral U.S. sanctions against the Castro regime in Cuba, which Lew rightly notes were “ineffective,” to put it mildly.

Lew’s larger point is that sanctions won’t work if countries don’t get the reward they were promised — in the removal of sanctions — once they accede to U.S. demands.

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