The New Era of Economic Warfare, With Edward Fishman
Mar 25, 2025
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Edward Fishman, a senior research scholar at the Center on Global Energy Policy and adjunct professor at Columbia University, dives into the evolving landscape of economic warfare. He discusses the U.S.'s expanded use of financial and trade sanctions and their effectiveness in achieving foreign policy goals. Fishman highlights the complexities of sanctions against nations like Iran and Russia, and the strategic use of export controls against China. He emphasizes the U.S. dollar's role in global trade and the impact of tariffs versus sanctions on international relations.
The evolution of U.S. economic sanctions has transformed from reliance on military enforcement to targeting financial institutions for greater effectiveness.
Current U.S. strategies involve using sanctions and export controls against adversaries like Russia and China to maintain geopolitical leverage and technological dominance.
Deep dives
Conventional Wisdom on Economic Sanctions
The perception that economic sanctions do not work effectively emerged in the early 21st century, largely due to the lengthy UN embargo against Iraq, which lasted from 1990 to 2003. Despite the extensive military involvement and a multinational effort to enforce the sanctions, they failed to alter Saddam Hussein's decisions or significantly weaken his regime. This belief in the ineffectiveness of sanctions was further reinforced by discussions during the early George W. Bush administration, culminating in the decision to pursue military options in Iraq after sanctions were deemed ineffective. Historical examples, such as failed embargoes against Iran and the USSR, showcase a recurring notion that sanctions rarely yield the desired political outcomes.
The Emergence of Financial Sanctions
A significant shift occurred around the mid-2000s when U.S. officials recognized the potential of financial sanctions to exert pressure without traditional military engagements. Stuart Levy's innovative approach, which involved targeting banks and leveraging intelligence to isolate Iran from the global financial system, marked a pivotal moment in this strategy. His insights led to more effective sanctions that did not rely on UN backing or military enforcement, reshaping how economic statecraft was utilized. This transformation illustrated a departure from conventional practices, as the U.S. could now threaten financial institutions globally to compel compliance with sanctions.
The Evolving Landscape of Economic Warfare
The utilization of economic sanctions has expanded to encompass various global adversaries, including Russia and China, reflecting a broader understanding of economic warfare. In response to Russia's takeover of Crimea in 2014, U.S. sanctions aimed to deter future territorial aggression, albeit underestimating the resilience of Russia's economy amidst low oil prices and the slow implementation of sanctions. Similarly, the approach towards China has shifted from a focus on negotiations to employing export controls aimed at curtailing technological advancement, particularly in the telecom sector. This ongoing economic tension underscores a strategic pivot towards sustaining U.S. technological superiority while addressing geopolitical challenges.
Assessing the Effectiveness of Economic Warfare
The effectiveness of sanctions and economic warfare tools remains a contentious topic, as evidenced by mixed results with Iran and Russia. While the sanctions forced Iran to the negotiating table, the outcomes have often fallen short of achieving comprehensive policy changes or long-term resolutions. The difficulty lies in striking a balance between utilizing economic measures and ensuring they are robust enough to meet strategic objectives without alienating allies or straining global markets. Ultimately, the way to maximize the efficacy of sanctions involves recognizing their limitations and using them judently and decisively to achieve foreign policy goals.
Edward Fishman, senior research scholar and adjunct professor at Columbia University and author of Chokepoints: American Power in an Age of Economic Warfare, sits down with James M. Lindsay to discuss the United States’ expanded use of financial and trade sanctions in recent years and whether they have enabled Washington to accomplish its foreign policy objectives.
