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How Economic Sanctions Are Used in US Foreign Policy

RESEARCH Working Paper by Ethan Kessler
"Sanctions" on board game letters in front of Russian and American flag

What are economic sanctions? How are they used in US foreign policy? And what should future policymakers consider before employing them?

Economic sanctions are a frequently used tool of US foreign policy. Understanding their legal mechanisms and history of use in US foreign policy is essential to using them effectively in the future. 

Sanctions are best understood by breaking them down in three ways. US policymakers should understand different types of sanctions available to them. Reviewing the evolution of sanctions in US history reveals their expansion from limited tools used to impose embargoes to a wide variety of tools including restrictions targeted at foreign elites and financial actions that enlist the help of foreign banks. Secondly, policymakers should understand the high costs that sanctions can impose on foreign civilian populations, whether by triggering high inflation rates, restricting imports of essential goods, or generally lessening trade. Finally, the history of sanctions failures and successes in US foreign policy is instructive for guiding future policymakers.

The main takeaways from past cases of sanctions use are to, if possible, do the following when crafting sanctions. 

  • Target factions and individuals that are likely to influence relevant policymakers. 
  • Target states, groups, or individuals with incentives to cooperate.
  • Implement sanctions with buy-in from states that the target could otherwise turn to for relief. 
  • Set realistic goals.
  • Implement actions that make the desired behavior change more appealing for the target.
  • Target a weak state (if the sanctions are aimed at a state).

These recommendations should not be understood as an exhaustive list of considerations for future policymakers, nor should they be understood as sufficient for understanding sanctions as a phenomenon. As the paper notes, sanctions can be influenced heavily by parochial interests, with scant consideration for broader strategy or changing the behavior of foreign actors. They can also be aimed at purely normative goals, in which case a change in behavior by the target is less of a priority. Nor is the list of recommendations above equally helpful in all cases, as it contains conditions that are often beyond the control of US policymakers. These insights should nonetheless improve readers’ understanding of sanctions as a foreign policy tool. 

About the Author
Ethan Kessler
Former Research Associate
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Ethan Kessler joined the Chicago Council on Global Affairs in 2021 and was a research associate in the Lester Crown Center on US Foreign Policy.
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