Trump loves sanctioning foreign countries — but he’s terrible at it

In his four years as president, Donald Trump has responded to nearly every major foreign policy problem with the same tool: sanctions.

Change the Iranian regime’s behavior? Sanctions. Dismantle North Korea’s nuclear arsenal? Sanctions. Depose Venezuela’s dictator? You guessed it: Sanctions.

That indiscriminate wielding of America’s economic might — in a strategy his administration labels “maximum pressure” — is a trademark of Trump’s foreign policy. No president, in the minds of experts I spoke with, has relied so heavily on sanctions to solve intractable problems.

But at the same time, experts I spoke to said no president has failed so clearly to grasp the nature of financial warfare and how to deploy it effectively.

“I’ve never seen a president use sanctions as much or as clumsily,” said David Baldwin, an international economics expert at Princeton University. “He’s like a bull in a china shop.”

Gibson Dunn

Yet Trump has little to show for his efforts. Iran’s leadership remains in power and is no closer to reaching a new diplomatic pact with the US over its nuclear program. North Korea’s nuclear and missile arsenals have grown in numbers and strength. And Venezuela’s president, Nicolás Maduro, still shows no sign of letting control of the country slip through his clenched fist.

That’s not to say Trump didn’t inflict economic harm on foreign countries, leaders, and individuals in his first term. US sanctions are directly responsible for deepening financial crises in all three nations, exacerbating woes caused by local mismanagement, corruption, and coronavirus outbreaks.

But that devastation has hurt millions of people in those countries much more than it has helped the Trump administration achieve its goals, making it easier for regimes to blame the US — and not themselves — for the pain.

The fundamental problem with Trump’s approach: He believes sanctions will get him what he wants, but he demands too much in return for their removal, or undermines them through weak enforcement and ever-shifting policies.

“When the president doesn’t believe in the sanctions program, the program loses all value,” former State Department sanctions official Edward Fishman told me.

Trump’s first term thus offers a key lesson: US sanctions can be very effective — and debilitating — but they work best when a president understands their limitations, how to make them stick, and when to coordinate them with other countries.

Otherwise, the nation those measures may end up isolating most is America.

How Trump’s reliance on sanctions failed

Sanctions are financial penalties a country places on a foreign government, business, or person. They usually forbid the use of economic necessities like American banks and financial markets, making it harder for a target to use or make money held in the US. The hope is that the afflicted parties will want access to those funds so badly that they’ll cave to US demands.

John Smith, who formerly ran the Treasury Department office responsible for implementing sanctions, told me he wasn’t surprised to see Trump use sanctions as often as he has.

“It allows the US to carry a big stick, which Trump likes, without cost of boots-on-the-ground military action, which Trump doesn’t like,” he said. And, he added, “they don’t cost the US a lot to impose, and they can be incredibly powerful” — a high-impact, low-risk action that appeals to this or any other president.

Trump has used sanctions on a number of foreign countries and individuals, but he’s used them as the primary means to achieve his desired policy goals in three major cases: Iran, North Korea, and Venezuela. Let’s take a look at each one.

Iran

The plan

After Trump withdrew from the Iran nuclear deal two years ago, his administration launched a “maximum pressure” campaign against the Islamic Republic. Simply put, the US places more and more sanctions on the regime until it finally decides to give up any pursuit of nuclear weapons and ceases developing missiles and supporting terrorist organizations (among other changes).

The goal, then, was to alter 12 of the most troubling aspects of Iran’s foreign policy and ratify the changes in a new, more encompassing deal before Tehran got any sanctions relief. Trump reiterated that stance in August, claiming he’ll sign such a pact in the first month of his second term (if he’s reelected, of course).

Trump had understandable reasons to think his plan would work. In pursuit of the nuclear deal, President Barack Obama placed what were then the harshest economic sanctions on Iran in history while getting other nations to join along in opposition to Tehran’s nuclear advances. That pressure led Iranian officials to the negotiating table and, ultimately, the nuclear agreement in 2015.

Trump was no fan of the deal, but experts said he took something from it: If a lot of economic pressure got Iran to stop improving its nuclear work, then even more sanctions might compel Tehran to bend further to America’s will. “Clearly, sanctions against Iran can work,” said Susan Allen, a sanctions expert at the University of Mississippi. “Sanctions against Iran did work,” though not necessarily in the way Trump envisioned.

With Trump’s withdrawal from the accord, his administration reimposed the sanctions lifted after the 2015 pact was signed and proceeded to add even more penalties on Iran, including on top government officials as well as the steel, iron, and oil industries.

The result

The Trump administration’s goal of changing Iran’s behavior simply hasn’t worked, at least not yet.

There was a problem with Trump’s plan: All of it was done without the support of US allies — primarily the European signatories to the Iran deal — who argued against America reneging on its commitment and for maintaining their own business ties to Tehran.

“We should do anything to preserve the deal,” German Chancellor Angela Merkel said in January. “We will continue to employ all diplomatic means to keep this agreement alive, which is certainly not perfect but it is an agreement and it comprises commitments by all sides.”

The Trump-led sanctions, though, undoubtedly had an impact.

Iran’s economy has cratered due to the economic pressure and because countries and companies are worried doing business with Tehran might invite US sanctions on them (these are known as “secondary sanctions”). Oil revenues are way down, so funds that would go to supporting proxy groups or nuclear research — or to improving the lives of everyday Iranians — have dwindled significantly.

“Every single day, as soon as people open their eyes, they face a dark and vague future,” Mehdi Rajabian, an artist and regime critic, told the Washington Post in January.

But as life got worse, so did Trump’s prospects of seeing Iran’s regime wither under the pressure.

Iran has attacked oil tankers in the Persian Gulf, oil fields in Saudi Arabia, military bases in Iraq housing US troops, and an unmanned US military drone over the Strait of Hormuz. Crucially, it’s also gradually stopped complying with the terms of the nuclear accord by stockpiling and enriching uranium at higher levels than the pact allowed. While Iran fiercely denies it seeks a nuclear bomb and remains far away from obtaining one, that possibility is more likely now than when Trump entered office.

To hear Trump’s team tell it, the pressure — not the result — is the point.

“Sometimes it’s the journey and sometimes it’s the destination,’’ Brian Hook, Trump’s outgoing special representative for Iran, told the New York Times on August 8. “In the case of our Iran strategy, it’s both. We would like a new deal with the regime. But in the meantime, our pressure has collapsed their finances.”

“By almost every metric, the regime and its terrorist proxies are weaker than three and a half years ago,” he continued. “Deal or no deal, we have been very successful.”

Kaveh Kazemi/Getty Images

But the truth is that the administration hasn’t been very successful at getting Iran to comply with American demands — even with the sanctions pressure — and there’s little chance of that happening despite new efforts to place even more penalties on the country.

“The idea that Trump will be able to quickly conclude an agreement with Iran if reelected is, without a massive change in the US position, a fantasy,” Eric Brewer, who worked on Iran in Trump’s White House and is now at the Center for Strategic and International Studies, told me in August. “Being willing to talk to relieve some pressure is a far cry from meeting the demands the administration has set out, which are fundamentally unworkable for Iran.”

North Korea

The plan

In 2017, North Korea tested increasingly powerful missiles, capping off the launches with its first intercontinental ballistic missile. Such provocative actions not only led Trump to threaten war in a series of heated exchanges with North Korean leader Kim Jong Un but also galvanized worried nations into placing immense economic pressure on Pyongyang.

That August, the US got China, Russia, and the rest of the UN Security Council to approve stringent sanctions financial on North Korea. The measure included a full ban on Pyongyang’s top exports like iron and coal, reducing the country’s revenue by about $1 billion. The following month, the council strengthened its sanctions even further by banning the sale of natural gas liquids to the country.

It was, in the minds of many experts at the time, an effective use of the “maximum pressure” strategy: Get allies, friends, and close North Korean partners — namely China — to signal that Pyongyang’s behavior was unacceptable and impose actual costs on the regime.

There were some initial complications. China, Russia, and even close US allies like Germany were still quietly trading with North Korea anyway, keeping the country’s economy afloat in the face of the harsh international sanctions. But the measures eventually had the intended impact: North Korea’s economy foundered under the weight of those multilateral penalties as it struggled to do business with its main trading partners in Beijing and other world capitals.

Trump didn’t just want North Korea to stop testing dangerous weapons, though — he wanted Kim to give up his entire nuclear arsenal. The White House in a February 2019 statement was explicit about the trade Trump sought: “The President has made clear that should North Korea follow through on its commitment to complete denuclearization, we will work to ensure there are economic development options.”

The result

Trump’s own actions undermined his policy in two key ways.

First, he invited Kim to three dramatic summits, events North Korean leaders always sought so they could boast that having nuclear weapons made their tiny nation a world power. While Trump administration officials claimed Kim’s presence at the meetings was partly due to US-led sanctions pressure, they were never necessary to convince the dictator to chat with a sitting US president.

“Sanctions didn’t get Kim to the table, Trump’s ego did,” Fishman, the former State Department sanctions official, said.

Second, Trump occasionally relaxed the sanctions pressure he put on Kim’s regime due to their budding friendship. For example, in March 2019 he tweeted a “withdrawal” of sanctions on North Korea, though it was unclear which measures he was referring to — they were likely ones announced a day prior or new penalties in the works.

Either way, then-White House press secretary Sarah Sanders explained that Trump didn’t want to further sanction North Korea because Trump “likes Chairman Kim, and doesn’t think these sanctions will be necessary.”

The bonhomie between Trump and Kim — underscored by Trump’s 2018 claim that they “fell in love” thanks to letters they sent back and forth — weakened the sanctions pressure, experts say. It signaled to other countries, especially China, that Trump wasn’t serious about enforcing the sanctions. The president’s friendship with Kim, rather than the end of North Korea’s nuclear development, drove his policy.

That’s had disastrous results. Even with the summits and sanctions — which the UN says North Korea has found ways to avoid — Kim’s nuclear arsenal has only gotten stronger. Indeed, Pyongyang is a more powerful nuclear player than it was before Trump took office.

The ones most feeling the economic pain so far are everyday North Koreans, who have suffered since the regime asked them to eat less food and buy fewer necessities due to dwindling state funds. Of course, Kim could spend those resources on improving the lives of his people instead of the power of his weapons, but that’s a calculation he was always likely to make and that the US should have anticipated.

But it didn’t, and the US, millions of North Koreans, and the world are worse off for it.

Venezuela

The plan

In January 2019, Venezuela was in the midst of a political standoff between two men who both claimed to be the legitimate president of Venezuela: Nicolás Maduro, who was reelected president in May 2018, and opposition leader Juan Guaidó.

Guaidó claimed the 2018 election was rigged and that he, as the head of the National Assembly (the country’s legislative body), was the rightful president according to the country’s constitution. The United States and nearly 50 other countries officially recognized Guaidó as Venezuela’s interim president and called Maduro’s claim to the presidency “illegitimate.” But Maduro has responded with defiance and showed no signs of stepping down.

The Trump administration, then, turned to sanctions to force Maduro out of Caracas.

That same month, Trump issued an executive order for the Treasury Department to sanction Petróleos de Venezuela (PdVSA), the behemoth state-owned oil and natural gas company that provides the country with thousands of jobs and billions in revenue. Maduro uses the enterprise to reward his cronies and buy loyalty. For instance, he offers top members of Venezuela’s military a stake in the energy giant.

The sanctions were intricate, but basically they boiled down to this: All PdVSA assets — like cash and property — in the US were frozen. Any cash earned in transactions with the United States would be held in an inaccessible account until Maduro transferred control of the company over to a democratically elected leader or Guaidó. However, refineries could still import Venezuelan crude as long as the profits didn’t go to Maduro’s regime.

The United States “will continue to use the full suite of its diplomatic and economic tools to support Interim President Juan Guaidó, the National Assembly, and the Venezuelan people’s efforts to restore their democracy,” Treasury Secretary Steven Mnuchin said at the time.

The result

The “economic tools” Mnuchin touted led to two major concerns.

First, former administration officials I spoke to said Trump’s team had devised a program to further increase sanctions pressure on Venezuela if Maduro proved defiant. The final step in that package was the PdVSA sanctions, which would only be used if the US found no previous option proved effective. Instead, the US used its final economic bomb in the first month, meaning US sanctions officials had to scramble to design new plans for what and whom to sanction if Maduro still wouldn’t leave.

Yuri Cortez/AFP via Getty Images

Second, the PdVSA sanctions essentially gave Maduro even more ammunition to paint the US as a big, mean bully trying to destroy Venezuela and make its people suffer.

Before 2019, US sanctions targeted people close to Maduro, most prominently his wife. But the PdVSA sanctions made it clear Washington was trying to take down not just Maduro, but Venezuela’s sputtering economy in the process.

If the economy tanked even further than it already had under his watch, the Venezuelan leader could blame the US sanctions and regain favor among both the elites — particularly the military leadership — whose support Maduro needs to remain in power, as well as everyday Venezuelans who are the most vulnerable to economic pressures.

Maduro badly needed a good scapegoat: Millions fled the country due to the economic crisis gripping the country. Inflation flew through the roof. Hunger rates skyrocketed. And diseases once thought eradicated from Venezuela sparked a new health crisis. Unsurprisingly, all of that and more made Maduro an unpopular leader.

But if the dictator could claim with some credibility that economic woes were America’s fault, not his, it would relieve some of the pressure on him.

That was likely a miscalculation, according to Fernando Cutz, who worked on Venezuela policy in Trump’s National Security Council from January 2017 to April 2018.

“When we first put sanctions in place against Venezuela, they were against individuals who were bad actors. They were targeted and limited in scope. I would say that they helped as a pressure tool at the time, though obviously they didn’t lead to our ultimate goal of restoring democracy in Venezuela,” he told me. “After I left, the scope and scale of sanctions were drastically expanded to large sectors of Venezuela’s economy.”

The administration’s sanctions from August 2019 were a case in point. One measure froze all the regime’s assets in the US and placed sanctions on any person or business that worked with Venezuela’s leaders, and another made it even harder for the nation’s oil sector to survive. Those moves were basically admissions that the US was out of specific ideas, but they would still inflict widespread economic pain to make life worse for Maduro and the millions suffering under his rule.

That play just hasn’t worked. Maduro has retained a firm grip on power. Guaidó’s opposition has fractured. Venezuela has moved closer to US adversaries like Russia. Meanwhile, Elliott Abrams, the US special representative for Venezuela, now has to split his time to work on Iran issues.

Altogether, it’s clear that not even the mighty economic power of the US could dislodge a failed leader. Then again, that was never likely to happen — though the Trump administration should have known better.

What can future presidents, or even Trump, learn from the past four years on sanctions?

Experts I spoke to were clear that Trump, from top to bottom, misused the powerful sanctions tool at his disposal. A president leading a future administration, or Trump in a second term, can glean three main insights from US sanctions policy since 2017.

1) Sanctions have their limits

“Sanctions have never brought down a regime. They are designed to create pressure, and therefore leverage,” said Cutz. “Unfortunately, the purpose of sanctions has been lost in the rhetoric of this administration, and many — including some in government — have become truly convinced that sanctions by themselves will bring about regime change. There’s just no precedent that should lead us to believing that.”

The goals America should seek with sanctions, then, must be achievable. Bringing down an entire government via economic pressure just isn’t in the cards, and likely never will be.

Venezuela comes to mind here. The whole point of the economic pressure was to make Maduro leave and replace him with Guaidó. But tanking the already sputtering economy was never going to be enough for that: Maduro had — and continues to have — a strong grip on the state’s security services and political system. Any plan that failed to address that, short of forcibly removing him in an invasion, was always doomed.

2) Sanctions work better when other countries join the US in applying them

It’s better when Washington’s friends join in on a sanctions campaign. Few experts doubt the economic pressure on Iran, North Korea, and Venezuela would be tougher, and their diplomatic options curtailed, if multiple nations worked against them.

The US taking on these fights alone makes it harder to take on these nations now, and stiff-arming allies makes it harder to add pressure down the line. “The US is losing sanctions-related partnerships around the world,” said Menevis Cilizoglu, director of international relations concentration at St. Olaf College.

This is what Obama understood that Trump didn’t. Obama purposefully brought in allies from Europe and Asia when sanctioning Iran to close off multiple fonts of cash. That squeezed Tehran from multiple angles and sent a global political signal that it needed to stop its nuclear work. By contrast, Trump’s sanctions plan allows the regime to do business with European and Asian nations, all while claiming the pressure campaign is just the US bullying Iran.

Win McNamee/Getty Images

That’s not to say Trump’s unilateral actions haven’t sent a strong signal: They have, but they haven’t yet compelled Iran to change in any of the 12 wanted ways.

It also doesn’t help when Trump sanctions anyone and everyone who wrongs him. Just last week, his administration sanctioned the two lead investigators at the International Criminal Court who are investigating potential war crimes committed by US troops in Afghanistan. That has less to do with the US using sanctions to achieve specific policy goals and more to do with retribution. That’s likely to lose America friends in the long run.

“The problem is not just that we are using sanctions,” Columbia University’s Richard Nephew said; it’s that in the Trump era, they’re being used “in ways and against targets that no one else sees as legitimate.”

3) Sanctions work better when the president doesn’t undermine them

This seems straightforward, but clearly it needs to be repeated. “The president needs to support the president’s own policies,” said Smith, now a partner at the Morrison & Foerster law firm.

When Trump cozies up to the leaders he’s sanctioning, it signals to everyone he may not be serious about enforcement. Companies and individuals will then make bets they can still do business with US sanctions targets because Trump won’t follow through on punishing them. Overall, it weakens the bite the penalties are meant to have.

Take Trump and Kim’s bromance. Sanctions are meant to be a blunt instrument, where the US imposes financial pain and tells the world “don’t do business with this government.” That’s usually accompanied by an antagonistic posture.

But there’s nothing antagonistic about the way Trump deals with Kim. Trump clearly likes the dictator, and he has failed to increase the pressure on him. It’s no wonder, then, that other nations like China have continued their business, giving Pyongyang an economic lifeline.

Allen, the University of Mississippi sanctions expert, said the next president will have to learn these lessons. But, she said, whoever sits in the Oval Office after Trump would be well served by following a simple rule to better wield their sanctions power: “Ensure sanctions are thoughtfully designed and more judiciously imposed.”

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