What Are Sanctions and How Do They Work? A History of US Economic Sanctions

The US uses sanctions more than any other country in the world, by a lot.


We’ve heard a lot about sanctions in the past year. After Russia’s invasion of Ukraine in February 2022, the United States and its allies responded with massive sanctions on Russia and sent billions in military aid to Ukraine. The response from the international community — led by the US — to sanction Russia was unprecedented

The US Treasury Department, in coordination with governments in 30 other countries, imposed approximately 2,000 sanctions to weaken Russia. At a recent address before the Council on Foreign Relations, Wally Adeyemo, the deputy secretary of the US Treasury Department, made the case that these US-led economic sanctions have significantly thwarted Russia’s war efforts in Ukraine. Specifically, the sanctions were meant to undermine Russia’s ability to build and buy advanced weaponry and military equipment. But more than a year into the war, one has to ask: Have these sanctions really worked? 

The US uses sanctions more than any other country in the world. America’s sanctions extend far and wide, from Iran to North Korea, Syria to Cuba, Belarus to Sudan, Venezuela, Libya, Somalia, and the list goes on.

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Sanctions are a double-edged sword. They are a tool US policymakers use to alter outcomes in other countries while avoiding outright war. But they can also wreak havoc on a society by targeting an entire country’s economy at the expense of civilians. And, as we’ve seen with sanctions relating to the war in Ukraine, they can devastate large swaths of the global economy, affecting populations worldwide. Sanctions are a tool of modern warfare and, according to new and existing research, not a very effective one. 

How do US sanctions work?

Economic sanctions are a means to an end in US foreign policy. Sanctions typically target human rights abusers, such as China’s treatment of Muslim Uyghurs or Saudi individuals involved in the killing of Washington Post columnist Jamal Khashoggi, adversarial foreign governments (think IranNorth Korea, and Syria), terrorist organizations (think Hamas or the Afghanistan Taliban), drug traffickers, and activities related to nuclear weapons. And sanctions come in many forms, including travel bans, blocking assets, and trade restrictions.

Sanctions can be comprehensive, impacting a whole country’s economy, or targeted to affect particular groups, companies, and individuals. In addition to the 30 or so sanction programs against countries, there are upwards of 6,000 individuals, businesses, and entities that have been blacklisted by the United States. Secondary sanctions are also used to deter third parties from engaging with the sanctioned country, group, company, or individual. 

Cuba is perhaps the best-known example of comprehensive sanctions because they have been in place there the longest; the United States continues its trade embargo on Cuba, which began in 1962, with the hope of isolating its economy and weakening the communist government. 

A recent case of more targeted sanctions is Myanmar: The US has sanctioned powerful individuals and entities linked to the military regime that overthrew the democratically elected government in 2021. Sanctions like these block individuals from accessing their assets in the United States, with the goal of weakening the military dictatorship and promoting democracy in Myanmar. 

Based on the strength of the US dollar, the rationale has long been that the American economy is so important to the international financial system that any measures taken by the US and its allies to cut off a country, group, or individual would ultimately change that actor’s behavior. As historian Nicholas Mulder wrote, “The dollar is the premier reserve currency and the most popular medium for global trade and debt issuance, a vast segment of international markets and firms falls under US jurisdiction in some way or other.”

The US president, government agencies, and Congress all have a role to play in enacting and implementing economic sanctions. Often the president determines sanctions based on national emergency authorities. Though sanctions can also be written into legislation by Congress, a president will often issue an executive order using emergency authorities to impose sanctions without Congressional approval. The departments of State, Treasury, and Commerce (and sometimes the Justice, Homeland Security, and Energy departments) all work to implement the policies of the executive and legislative branches. 

What is the history of US sanctions? 

In his recent book The Economic Weapon: The Rise of Sanctions As a Tool of Modern War, Mulder traces the modern use of economic sanctions to President Woodrow Wilson and the post-World War I period. During WWI, the Allied Powers used economic blockades against the German, Austro-Hungarian, and Ottoman empires. After winning WWI, the founders of the League of Nations, particularly President Wilson, viewed sanctions as “something more tremendous than war.” In other words, a way to end wars that does not involve physical conflict. 

According to Mulder, the logic of economic sanctions in the interwar period in many ways mimics how policymakers consider the threat of nuclear weapons: Due to the devastating consequences societies would face, it is believed that economic sanctions will deter leaders from going to war. The appeal of sanctions, as with nuclear weapons, is the idea that they won’t have to be used because “being quarantined from global commerce was an unbearable form of imprisonment.” Threatening their use is enough. 

But this thinking no longer holds true. Sanctions have become one of the most widely used foreign policy tools by the United States — and use goes far beyond threats. Between 2000 and 2021, the use of sanctions by the US increased by over 900%. But frequent use of sanctions to achieve US foreign policy goals does not mean they are necessarily successful; rather, their efficacy is broadly debated. 

What is the downside to US sanctions? 

According to Mulder, the efficacy of US sanctions has declined over time: “While in the 1985-1995 period, at a moment of great relative Western power, the chances of sanctions success were still around 35 to 40 percent; by 2016 this had fallen below 20 percent.” 

Some estimates are even lower. Economist Agathe Demarais’s newest workBackfire: How Sanctions Reshape the World Against US Interests, shows US sanctions since the 1970s have been effective only 13% of the time.

Economic sanctions, while more effective in certain circumstances than others (some research suggests they are more useful against other democracies and are more effective in achieving modest goals), tend to worsen relations with the sanctioned country (including with civilian populations), not improve them. In short, economic sanctions have the possibility to backfire on the United States and its goals. 


So Jin Lee, a nonresident fellow at my organization, the Eurasia Group Foundation (EGF), and a Harvard and MIT postdoctoral fellow who researches economic statecraft and sanctions, tells Teen Vogue that “sanctions actually give the target state’s leadership a good excuse to further villainize the United States and say we are suffering because of the United States.”  

A major component of sanctions efficacy is also psychological, Lee explains. That is why sanctions have the potential to create a “rally around the flag” effect on citizens in the targeted country. This kind of economic punishment could push people to side with their government more than the United States.

Beyond the poor rate of success in achieving specific foreign policy goals, like deposing a particular leader or stopping human rights abuses, the conditions that sanctions create for civilians in target countries can be more deadly than war itself. Mulder’s book shows how economic sanctions directly impact civilians. For instance, in WWI, the US economic blockade against Germany and its allies caused mass starvation and illness that killed 300,000-400,000 people in Central Europe and 500,000 people in the Ottoman Empire, according to the author’s research. 

Today we can look at the cases of Iran and Afghanistan. It’s no secret that US sanctions against these countries have contributed to severe humanitarian concerns in Iran, including hyperinflation and constraints on importing things like lifesaving medicines and medical equipment. It should be noted that US sanctions are not solely to blame for Iran’s struggling economy. “There’s mismanagement and corruption on the part of the Iranian government,” EGF nonresident fellow and Iran expert Assal Rad tells Teen Vogue, “but none of that takes away from the impact of sanctions.”


In Afghanistan, the US government froze billions of dollars in Afghan central bank assets held in the Federal Reserve Bank of New York when the Taliban came to power, which, according to Human Rights Watch, has contributed to economic and humanitarian catastrophes in Afghanistan. Meanwhile, the Taliban remains in power and, according to the World Food Programme, nearly 20 million people are not consuming enough food.

Sanctions are technically a tool the United States can use to avoid sending in military personnel for boots on the ground-style warfare, but they are still coercive and costly. “The consequences of [sanctions] are akin to war and in many ways are more dangerous than war,” says Rad. “Unlike hot war, where there’s conflict and there are bombs dropping, sanctions are a silent killer. They don’t get the same kind of coverage, the same kind of reaction from people.”

What are sanctions good for?

When employed correctly, economic sanctions can be effective, economist Demarais told NPR in a recent interview, but it’s a complicated picture. The timeline of events suggests sanctions on Iran, for example, provided the United States with leverage to negotiate that ultimately lead to the historic nuclear deal in 2015; however, other analyses of the Iran nuclear deal suggest domestic factors and years of meticulous diplomacy were the leading factors in the equation, not sanctions. 

The usefulness of sanctions against Russia is up for debate too. Pain has certainly been inflicted on Russia’s economy, but the sanctions have not yet led to Russia scaling back its invasion of Ukraine. Russia has adjusted to its new economic reality and circumvented the system by partnering with countries like China, the UAE, and Turkey. 

At first glance, economic sanctions make a lot of sense: They pack a stronger punch than diplomatic negotiations, but they aren’t as harmful as all-out war (at least in appearance). But given their low success rate, it’s concerning how popular they have become as a tactic in US foreign policy. As with the use of military force, sanctions can be costly and backfire on the United States and its interests.


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