Woman smoking in Havana.
While the global economy has been shaken by the Trump administration’s aggressive imposition of tariffs, there is an additional cascade of problems resulting from economic sanctions — economic measures imposed for political objectives, as distinct from tariffs or other measures employed solely in the context of trade.
Since Donald Trump took office in January, his administration has continued the practices of his first term, with draconian measures designed to disrupt the economy, infrastructure and critical social services in the countries he targets, in order to create chaos, desperation and regime change.
The first Trump administration declared a policy of ‘maximum pressure’ — with brutal consequences for vulnerable populations, such as women, children and the poor. In February 2019, Secretary of State Mike Pompeo, referring to US sanctions against Iran, said: ‘Things are much worse for the Iranian people, and we are convinced that will lead the Iranian people to rise up and change the behaviour of the regime.’ (1) A few weeks later, Pompeo made similar statements about the US sanctions on Venezuela (2). The Biden administration left many of these polices in place. Biden might not have imposed such extreme measures of his own accord, but there would have been political costs if he had lifted them. They remained, more out of inertia than as a deliberate policy choice. As a result, after his reelection, it has not been hard for President Trump to pick up where Biden left off.
But the situation now is more precarious than it was four years ago for those countries targeted by US sanctions. Those on the receiving end of the most severe measures are less resilient; there are fewer resources available to mute the sanctions’ impact.
The Trump administration has, of course, taken a very different position with regard to Russia. President Trump has been reluctant to criticise Russia for its invasion of Ukraine and the war crimes that have been extensively documented; and his negotiations between Russia and Ukraine seem intended to ensure that the outcome of these negotiations would considerably benefit Russia. By contrast, the European Union recently adopted its sixteenth package of sanctions against Russia, and is reported to be exploring ways to capture Russia’s frozen central bank assets (3). Australia and New Zealand also recently imposed new measures on Russia. Meanwhile, the Trump administration has sought to undermine such efforts — in March, the US blocked a Canadian proposal for the G7 countries to set up a task force targeting Russia’s ‘shadow fleet’ of oil tankers circumventing the West’s sanctions (4).
However, outside of Russia, the second Trump administration’s sanctions practices have been relentless, brutal and somewhat bizarre. Shortly after his inauguration, President Trump ordered sanctions to be imposed on Karim Khan, the chief prosecutor of the International Criminal Court (ICC) — one of the preeminent bodies of global governance — which issued arrest warrants last fall for Israeli prime minister Benjamin Netanyahu and other Israeli government officials, alleging war crimes and crimes against humanity over Israel’s attacks on Gaza. In his first administration, Trump had likewise sanctioned ICC officers, in the face of scathing criticism from the international community; his recent actions received the same response (5).
But perhaps the most extensive harm done in President Trump’s second term in regard to US sanctions policy has been to resume the weaponisation of unilateral economic sanctions against whole populations. There is no serious dispute that broad-based sanctions cause severe and indiscriminate humanitarian harm. The empirical evidence overwhelmingly shows that sanctions negatively affect the civilian population in many ways, including per capita income, poverty, inequality, mortality and human rights. Looking closely at three cases — Iran, Afghanistan and Venezuela — economist Francisco Rodríguez shows that when sanctions restrict the government’s access to foreign exchange, this undermines the state’s ability to provide essential public goods and services (6).
The comprehensive sanctions on Iraq imposed by the UN Security Council in the 1990s triggered global condemnation of the sanctions that would cripple an entire economy, compromising health, education and basic needs of the population as a whole. UN agencies such as UNICEF and WHO, as well as numerous other international organisations and leading experts in health and nutrition, documented the humanitarian consequences of broadside attacks on an economy. Even if imports of food and medicine are theoretically permitted, sanctions interfere with international payments and shipments of food and fuel. Sanctions imposed broadly on the economy trigger hyperinflation, increase unemployment and poverty and undermine the country’s ability to import goods needed to maintain and operate the infrastructure. As transportation and the electrical grid start to fail, food and medicines cannot be delivered, water treatment plants cannot operate properly, and infant and child mortality rates increase.
For these reasons, the use of broad sanctions targeting a country’s major economic sectors have been repeatedly denounced as human rights violations, and the UN, the US administrations of George W. Bush and Barack Obama and others proclaimed their commitment instead to targeted ‘smart’ sanctions. Smart sanctions are ostensibly designed to affect only those engaged in human rights violations or other wrongful acts, while leaving the broader population unaffected. So it was particularly concerning to see the first Trump administration reverse course, announcing the use of sanctions to impose ‘maximum pressure’ against the target country — that is, indiscriminate measures, imposed without restraint. And within days of Donald Trump taking office this January, his administration announced that sanctions would again be used to impose ‘maximum pressure’ on target countries.
Shortly after his inauguration, President Trump announced that he was reimposing ‘maximum economic pressure’ on Iran, with the goal of reducing oil exports to zero (7). Individual sanctions were then imposed on Iran’s minister of petroleum, who oversees the country’s oil exports, as well as the head of the National Iranian Oil Company, and oil brokers in the UAE, Hong Kong, and elsewhere (8). The consequences of this are significant: anyone who engages in transactions with individuals who are sanctioned by the US may themselves suffer significant penalties, including exclusion from the US market or financial system. So while it seems that only specific Iranian individuals and companies have been sanctioned, the effect is to create a ‘chilling effect’ that will undermine Iran’s ability to sell its oil anywhere in the world, even to those over whom the US has no legitimate jurisdiction.
The Trump administration has also taken several other measures targeting non-US third parties engaged in oil trade with Iran. The Treasury Department imposed sanctions on a Chinese refinery on the grounds that it had purchased Iranian oil. Treasury Secretary Scott Bessent was explicit in threatening any company in the world that engages in transactions involving Iranian oil: ‘Any refinery, company, or broker that chooses to purchase Iranian oil or facilitate Iran’s oil trade places itself at serious risk. The United States is committed to disrupting all actors providing support to Iran’s oil supply chain.’ (9)
In addition, in March, the administration filed a request with a court for authorisation to seize $47m related to oil sold by the National Iranian Oil Company to a Swiss company, which then resold it to other international companies. Although none of these are US entities, the Trump administration maintained that it has a right the seize the funds in part because the transaction took place in US dollars; and because Iran’s sale of oil on the global market affected US oil prices (10). The message is clear: any country or company in the world that buys oil from Iran is at risk of having its funds seized by the Trump administration on the very questionable grounds that the oil sale took place in dollars, or that Iranian oil sales can affect the global market price.
The Trump administration also once again took up its ‘maximum pressure’ campaign against Venezuela, introducing secondary sanctions against third countries purchasing oil. Oil exports, on which the country is heavily dependent, dropped 11.5% in March, due to US tariffs and sanctions (11). As with Iran, the Trump administration has increasingly weaponised the use of secondary sanctions, warning that ‘countries importing Venezuelan oil will face consequences.’ (12) And as with Iranian oil sanctions, the consequences could be severe. Any country that imports Venezuelan oil, whether directly or indirectly, may face 25% tariffs on any goods exported to the US (13). The consulting firm Rapidan Energy has called the secondary sanctions threatened by the Trump administration ‘unprecedented and legally questionable.’ (14)
Venezuela is already in the midst of a severe food crisis, which has triggered massive emigration. Economist Francisco Rodríguez projects that further tightening of sanctions will result in an estimated one million more Venezuelans leaving the country over the next five years than would be the case without sanctions (15). Meanwhile, the Trump administration has been deporting Venezuelans who have entered the US during the crisis in their own country — and has threatened Venezuela with yet more sanctions if it does not accept these deportees. In March, Secretary of State Marco Rubio announced that ‘Unless the Maduro regime accepts a consistent flow of deportation flights, without further excuses or delays, the US will impose new, severe, and escalating sanctions.’ (16)
Likewise, as Cuba now faces the most severe economic crisis it has seen in two decades, the Trump administration has announced a return to its ‘maximum pressure’ campaign against the island nation. Mauricio Claver-Carone, the current Trump administration’s special envoy for Latin America, said last month that the US could be ‘very creative’ in finding new ways to overthrow the Cuban government. ‘In 2019, the policy was maximum pressure, but we never got to maximum pressure,’ he said recently. ‘We didn’t even get to 50% of maximum pressure. There’s a whole bunch of stuff to go,’ he said. Referring to the goal of regime change in Cuba, he said ‘So we have to be all in. Go big or go home.’ (17)
In the last days of his presidency, Joe Biden lifted some key sanctions against Cuba. President Trump immediately reinstated all of them. Cuba was re-designated a ‘State Sponsor of Terrorism’, a designation that has been derided by many, including former senior US intelligence officials, as groundless (18). But the consequences are hard-hitting: the SSOT designation drives away banks, investors, and trade partners, worsening Cuba’s economic crisis.
The second Trump administration also disrupted financial remittances sent from family members abroad. All remittances to Cuba sent by wire transfer are processed through a Cuban financial institution. In the first Trump administration, that institution was Fincimex (Financiera Cimex S.A.), which was sanctioned by President Trump a few weeks before the 2020 presidential election, in a blatant move to secure the electoral support of the anti-Castro Cuban-American community in Florida. The consequences were severe, even catastrophic, for many of the thousands of Cuban families that depend upon remittances from family members living abroad. Western Union, which was the primary provider of money transfer services to Cuba, was forced to shut down its 400 branches across the island (19).
In the absence of legal, regular ways to transfer money, Cuban-Americans living abroad increasingly had little choice but to carry large amounts of cash in person, or use ‘cash mules’. Even though there is nothing wrong with providing financial support to one’s family, the loss of legal transfer companies such as Western Union effectively criminalised an essential economic channel for the survival of thousands of Cuban families. This in turn creates risk for all involved: the ‘mules’ who carry large amounts of cash on them may be robbed, or if caught, may be prosecuted; while those sending money home may be criminally prosecuted as well, or may find that the ‘mule’ absconded with their funds.
The Biden administration, in negotiations with the Cuban government, agreed to permit transfers through a different financial institution, Orbit S.A. Legal remittances resumed, providing greater security and reliability for all concerned. But within days after President Trump’s inauguration, Orbit was sanctioned (20), once again derailing the legal transfer of family remittances, and presumably compelling their re-routing through dangerous, insecure and illicit channels.
In the first hundred days of his presidency, President Trump’s weaponisation of sanctions has mirrored his many destructive policies in other domains. At the same time, he has resumed the sanctions policies of his first administration — creating economic havoc, attacking migrants and flouting international law. It is an administration that is relentlessly indecent and inhumane and, it appears, simply unable to see anything wrong with that.