Washington’s Extraordinary Hubris of Sanctioning Friends

Doug Bandow / AntiWar.com

 (May 19, 2021) — One aspect of American exceptionalism is undoubtedly true. American policymakers believe that they have been anointed by heaven to rule the world. Just as God cares if a sparrow falls to earth, US officials believe anything anyone does anywhere on the planet is a matter of Washington’s concern. That is reflected in a foreign policy which essentially has turned the Monroe Doctrine into a global strategy: the US, and only the US, is entitled to intervene everywhere on earth. 

Admittedly, the policy is not entirely consistent, with Uncle Sam sometimes implicitly delegating its authority. For instance, Washington cares little if, say, France sends its troops to Francophone Africa. Libya became a military mishmash involving several European and Middle Eastern allies, while Washington stuck with diplomacy. American officials did not object when Saudi Arabia used its military to bolster Bahrain’s minority Sunni monarchy, crushing largely Shia pro-democracy protests; worse, the US actively aided Riyadh’s murderous invasion of Yemen.

However, the US has tried, often at great expense in blood and treasure, to generally keep order and transform societies in Central Asia, the Balkans, Eastern Europe, the Middle East, and the Asia-Pacific. Washington’s moralistic arrogance and imperial pretensions often proved breathtaking. Unfortunately, the result has been many costly failures, such as the Iraq invasion.

Even more intrusive, however, is US sanctions policy. Originally they were just restrictions on Americans. For example, the Cuban embargo, applied six decades ago, prevents (with some exceptions) Americans from dealing with Cuba. Other governments typically did the same, restricting only their citizens, not foreign nationals. No one imagined that Washington was empowered to unilaterally regulate global commerce and punish anyone anywhere who defied American dictates.

However, in the 1980s US policymakers discovered secondary and financial sanctions. Given America’s global economic dominance, Washington now can make other nations and businesses enforce US policies. Any bank that uses dollars or relies on transactions routed through America can be fined billions of dollars for conducting any transaction, no matter how minor, with a sanctioned person or entity. In this way Washington seeks to force the entire world to implement American policy.

This has caused allied states, most notably in Europe, to follow US policy even when contrary to their own interests. For instance, European firms and individuals are punished for investments in Cuba. Europeans long were effectively barred from dealing with Sudan. More recently US sanctions prevented European companies from serving the Iranian market under the Joint Comprehensive Plan of Action even as European governments attempted to save the accord from the Trump administration’s counterproductive “maximum pressure” campaign.

However, these steps, which triggered European resistance rather than acquiescence, did not go far enough for America’s hyper-interventionists and extremist hawks who, some suspected, hoped to create an excuse for war in several hotspots. (Many of them are cheerleading Israeli strikes on Palestinian civilians in the latest round of fighting between Israel and Hamas.) 

The US also took a more hostile position toward Russia than did Europe. Washington policymakers, separated from Moscow by a large ocean, may have felt freer to risk conflict, since it would be primarily fought in Europe. After all, that was the case for both world wars in the 20^th century. Nor had neoconservatives shown much concern for non-American casualties, which ran in the hundreds of thousands or more, during the nearly two decades of quasi-imperial conflict. The ever-egregious Sen. Lindsey Graham even dismissed the cost of a renewed Korean War since it would be “over there” on the Korean Peninsula. Why worry about a few hundred thousand or million South Korean casualties among allies, he apparently thought?

Believing that it was entitled to set its own energy policy, Germany agreed with Russia to build the Nord Stream 2 natural gas pipeline project. The US government then lashed out at Berlin directly. In December 2019 American legislators, convinced of their unique virtue and perspicacity, approved legislation targeting European companies involved in the project. The measure, with Texas Sen. Ted Cruz as one of the authors, also would have the convenient benefit of promoting American liquified natural gas exports. It is convenient when an American politician claiming to do good also does well for his favored interest groups.

Although the project was almost complete, the sanctions threat caused European firms to flee. Cruz, along with Wisconsin Sen. Ron Johnson and Arkansas Sen. Tom Cotton, appeared to enjoy writing letters threatening European enterprises with economic devastation and ruin. As Lord Acton warned, “power tends to corrupt, and absolute power corrupts absolutely.” So it had with such sanctions supporters.

The GOP trio even threatened a German port owned by a local government: “This letter serves as formal legal notice that these goods, services, support, and provisioning risk exposing Fährhafen Sassnitz GmbH and Mukran Port, as well as your board members, corporate officers, shareholders, and employees, to crushing legal and economic sanctions, which our government will be mandated to impose.

These sanctions include potentially fatal measures that will cut off Fährhafen Sassnitz GmbH from the United States commercially and financially. The only responsible course of action is for Fährhafen Sassnitz GmbH to exercise contractual options that it has available to cease these activities.” Unsurprisingly, Berlin’s reaction was anger and outrage, especially since officials believed Cruz’s participation was based on squalid economic interest. 

German officials refused to surrender to their wannabe transatlantic masters and turn Berlin’s foreign policy over to Washington. Moscow stepped in to lay pipe, leading Congress to expand the penalties. Every German refusal to yield led to additional congressional demands for tighter sanctions. Indeed, the Trump administration appeared perfectly happy to ruin European companies, and likely would have doubled down had Trump been reelected. In contrast, the Biden administration, having promised to strengthen allies, has been less vigorous in opening new fronts in the economic war. 

Still, under congressional pressure Secretary of State Antony Blinken announced: “As the President has said, Nord Stream 2 is a bad deal — for Germany, for Ukraine, and for our Central and Eastern European allies and partners. … As multiple US administrations have made clear, this pipeline is a Russian geopolitical project intended to divide Europe and weaken European energy security. The sanctions legislation Congress passed in 2019 and expanded in 2020 has significant support from a bipartisan Congressional majority. The Biden Administration is committed to complying with that legislation. The Department reiterates its warning that any entity involved in the Nord Stream 2 pipeline risks US sanctions and should immediately abandon work on the pipeline.”

However, though opposed to the pipeline, the administration so far has refused to add penalties. It does not want a showdown with one of the allies with whom the president committed to strengthen relations. Instead, he named a special envoy to press Berlin to voluntarily surrender its sovereignty to America, which is likely to prove to be a hapless task.

Washington officials offer several unpersuasive justifications for going to economic war against a longtime ally to impose America’s Russophobic agenda. One is that the pipeline is not in Germany’s interest. Although the project would ease the transit, lower the cost, and improve the security of natural gas supplies, all obvious benefits to the German people, Washington insists that the pipeline would be bad since it might increase Berlin’s already heavy energy reliance on Russia. American policymakers, who, not so incidentally, hope to expand US LNG exports, purport to be lecturing Germany on what is in Germany’s interest. Imagine how Americans would respond if the situation were reversed. 

Still, there would be little objection if Washington simply offered its opinion, no matter how self-serving and biased. The pipeline is controversial in Germany – the Green party’s chancellor candidate, Annalena Baerbock,opposes the project – and faces substantial criticism within Europe. However, threatening German institutions and European firms in the name of helping Berlin is arrogance extraordinaire, and will not soon be forgotten.

Forget Washington’s risible claims of concern for the Bundesrepublik’s welfare, The US government is much more interested in landing another economic blow on Moscow. Alas, America’s confrontational policy is pushing the two countries toward a new cold war for no good reason, since Russia poses no serious military threat to America – no one believes that Putin wants war with the US and even most Europeans recognize that he has no interest in attacking them, which would result in manifold disastrous costs but few recognizable benefits. Nor do Washington and Moscow have any vital interests in conflict elsewhere. Most disputes, such as over Syria and Venezuela, are peripheral issues at most.

Moreover, steadily increasing sanctions have failed to force Russia to yield to the West, despite the burden they placed on the former’s economy. Piling on additional penalties is more likely to entrench hostilities and encourage malicious Russian retaliation than force surrender and subservience, as demanded in Washington. With a summit between Biden and Putin expected in the next month, it would be better for the US to defuse tensions than open yet another front in an ever-expanding economic conflict.

Ironically, a failure to complete the pipeline would not stop Moscow’s exports, but rather force them to continue to go through Ukraine, enriching Kiev. In fact, the transshipment fees earned by Ukraine are cited as a separate justification for halting the pipeline. Yet Kiev is no model of principled governance likely to spend such resources well. Although Ukraine deserves sympathy, stuck in a bad neighborhood and battered by Russia, Kiev never has been an important American interest. It spent the last couple centuries as part of the Russian Empire and Soviet Union and matters little geopolitically to America. Kiev is important politically because ethnic Ukrainians, who mostly originate in the anti-Russian east, push their personal agenda on Washington despite the geopolitical cost to the US

If American policymakers want to score political points by assisting Ukraine, they shouldn’t attempt to conscript German resources. Rather, Congress should appropriate funds and make its case to voters. However, members are desperate to hide their special interest favoritism since subsidizing Ukraine when America is running annual deficits in excess of $3 trillion annually is more than difficult to justify.

The hubris apparent on Capitol Hill results in another important cost to America. Washington’s assault on German sovereignty created resentment likely to impair future cooperation. Even a Green-led government, which could emerge from elections scheduled for September, might be more likely to resist US initiatives elsewhere despite its opposition to the pipeline. American officials who believe their destiny is to rule the world sometimes miss the acrimony, rancor, and other blowback generated by their heavy-handed actions.

Washington’s approach to Nord Stream 2 encapsulates the failure of US foreign policy at least since the end of the Cold War. American policymakers believe they see clearer and further than anyone else. They believe they are entitled to impose their preferences on the entire world. Finally, they care little or nothing about the costs they impose on others. Eggs and omelets, as communists used to say. US officials’ position to friend and foe alike is submission or ruin. And as is evident in the Middle East, the outcome too often is ruin.

Vladimir Putin’s Russia is an unpleasant actor, but Washington has done much to contribute to rising hostilities. It is in America’s interest to resolve rather than extend the conflict over Ukraine. Instead of piling on more sanctions, Washington should seek a modus vivendi which both supports Kiev’s independence and addresses Moscow’s security concerns.

Equally important, the US should implement what candidate George W. Bush long ago called a “humble foreign policy.” That should begin by respecting the decisions of democratic allies of long-standing. There is no greater misuse of America’s economic dominance than sanctioning America’s allies and friends, especially for economic gain.

One of the worst aspects of Donald Trump’s foreign policy was its promiscuous use of economic sanctions in the name of “maximum pressure” against multiple governments. The result was mass hardship for oppressed peoples with no security gain for Americans. The Biden administration has an opportunity to back away from a policy which is both myopic and counterproductive. Minimizing use of economic sanctions, including against the Nord Stream 2 project, would be a good place to start.

Doug Bandow is a Senior Fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is author of Foreign Follies: America’s New Global Empire.

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