Abstract
In an increasingly competitive world, American power has declined on the international scene since the mid-2000s. While different on innumerable counts, both Presidents Barack Obama and Donald Trump have shared a diagnosis of a downward trend for American power and have sought to capitalize on American economic strengths. Sanctions use, already increasing under the Obama administration, has exploded under the Trump administration. In concert with President Trump’s zeal for trade wars and tariffs, America under the Trump administration has become much more economically confrontational. While aspects of the Trump administration’s approach may be unique, others represent a continuation of already existing trends and may intensify in an era of great power competition.
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Notes
- 1.
For a masterful analysis of the weaponization of economic interdependence as part of the Trump administration’s larger relationship with Europe, see Constanze Stelzenmueller, “Hostile Ally: The Trump Challenge and Europe’s Inadequate Response” (Washington, DC: Brookings Institution, August 2019), https://www.brookings.edu/research/hostile-ally-the-trump-challenge-and-europes-inadequate-response/.
- 2.
See “Strategic Implications of Transatlantic Trade Negotiations,” with Fabien Besson, Rapport Schuman sur l’Europe, l’état de l’Union en 2014, 2014.
- 3.
“Positive Views of Free Trade Agreements Rebound to Pre-2016 Levels,” Pew, May 10, 2018, https://www.pewresearch.org/fact-tank/2018/05/10/americans-are-generally-positive-about-free-trade-agreements-more-critical-of-tariff-increases/ft_18-05-10_trade-tariffs_positive_views/.
- 4.
“Continued Partisan Divides in Views of the Impact of Free Trade Agreements,” Pew, April 24, 2017, https://www.pewresearch.org/fact-tank/2017/04/25/support-for-free-trade-agreements-rebounds-modestly-but-wide-partisan-differences-remain/ft_17-04-24_freetrade_usviews_2/.
- 5.
European Commission, “European Commission Reacts to the US Restrictions on Steel and Aluminium Affecting the EU,” May 31, 2018, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1851.
- 6.
Ana Swanson and Jim Tankersley, “Tariffs on China Don’t Cover the Costs of Trump’s Trade War,” New York Times, July 15, 2019, https://www.nytimes.com/2019/07/15/business/trade-war-tariffs-revenue.html.
- 7.
Ryan Hass, “On U.S.-China Trade, America Is Off Track,” Brookings Institution, June 24, 2019, https://www.brookings.edu/blog/order-from-chaos/2019/06/24/on-u-s-china-trade-america-is-off-track/.
- 8.
Richard Cowan, Susan Cornwell, and Andrea Shalal, “Top U.S. Trade Official Submits USMCA Ideas to Democrats: Lawmakers,” Reuters, September 11, 2019, https://www.reuters.com/article/us-usa-trade-usmca/top-us-trade-official-submits-usmca-ideas-to-democrats-lawmakers-idUSKCN1VW2NL.
- 9.
European Commission, “Joint U.S.-EU Statement Following President Juncker’s Visit to the White House,” July 25, 2018, https://europa.eu/rapid/press-release_STATEMENT-18-4687_en.htm.
- 10.
Ana Swanson, “As Trump Escalates Trade War, U.S. and China Move Further Apart with No End in Sight,” New York Times, September 1, 2019, https://www.nytimes.com/2019/09/01/world/asia/trump-trade-war-china.html.
- 11.
Corrie Driebusch and Nathan Allen, “Stocks Close Lower as Trump’s Mexico Tariff Threat Rattles Markets,” Wall Street Journal, May 31, 2019, https://www.wsj.com/articles/global-stocks-and-bond-yields-drop-on-mexico-tariff-concerns-11559289992.
- 12.
Adam S. Posen, “Trump’s New Tariff Actions: A Wakeup Call to Global Markets,” Peterson Institute for International Economics, May 31, 2019, https://piie.com/blogs/trade-investment-policy-watch/trumps-new-tariff-actions-wakeup-call-global-markets.
- 13.
Chuck Chiang, “Alarm Bells Ring Over Non-Market Economy Clause,” Business Vancouver, October 11, 2018, https://biv.com/article/2018/10/alarm-bells-ring-over-non-market-economy-clause.
- 14.
Peter Chase, “Time to Hit ‘Reset’ on Transatlantic Trade,” The Ripon Forum 53, no. 2 (April 2019), https://www.riponsociety.org/article/time-to-hit-reset-on-transatlantic-trade/.
- 15.
Peter Harrell and Elizabeth Rosenberg, “Economic Dominance, Financial Technology, and the Future of U.S. Economic Coercion” (Washington, DC: Center for a New American Security, April 29, 2019), https://www.cnas.org/publications/reports/economic-dominance-financial-technology-and-the-future-of-u-s-economic-coercion, 7.
- 16.
On this, read Jacob J. Lew and Richard Nephew, “The Use and Misuse of Economic Statecraft: How Washington Is Abusing Its Financial Might,” Foreign Affairs, November/December 2018, https://www.foreignaffairs.com/articles/world/2018-10-15/use-and-misuse-economic-statecraft.
- 17.
US Department of the Treasury, “Fact Sheet: Overview of Section 311 of the USA PATRIOT Act,” https://www.treasury.gov/press-center/press-releases/Pages/tg1056.aspx.
- 18.
“Sanctions and Financial Pressure: Major National Security Tools,” US Congress, House of Representatives, House Foreign Relations Committee, 115th Congress, Statement of Juan C. Zarate, Chairman and Co-Founder, Financial Integrity Network, https://docs.house.gov/meetings/FA/FA00/20180110/106761/HHRG-115-FA00-Wstate-ZarateJ-20180110.pdf.
- 19.
Peter Harrell, Elizabeth Rosenberg et al. “Maintaining America’s Coercive Economic Strength: Five Trends to Watch in U.S. Sanctions” (Washington, DC: Center for a New American Security, 2019), https://www.cnas.org/publications/reports/maintaining-americas-coercive-economic-strength.
- 20.
Elizabeth Rosenberg quoted in Kathy Gilsinan, “A Boom Time for U.S. Sanctions,” The Atlantic, May 3, 2019, https://www.theatlantic.com/politics/archive/2019/05/why-united-states-uses-sanctions-so-much/588625/.
- 21.
Andrew Cockburn, “A Very Perfect Instrument: The Ferocity and Failure of America’s Sanctions Apparatus,” Harpers Magazine, September 2013, https://harpers.org/archive/2013/09/a-very-perfect-instrument/.
- 22.
For example, after the invasion of Kuwait, Saddam Hussein’s assets were frozen by the US Treasury’s Office of Foreign Assets Control (OFAC) overnight with the stroke of a pen. See Andrew Cockburn, “A Very Perfect Instrument.”
- 23.
Jacob J. Lew and Richard Nephew, “The Use and Misuse of Economic Statecraft.”
- 24.
Matthew Nussbaum and Elana Schor, “Trump Signs Russia Sanctions Bill but Blasts Congress,” Politico, August 2, 2017, https://www.politico.com/story/2017/08/02/trump-signs-bipartisan-russia-sanctions-bill-241242.
- 25.
Peter Harrell, Elizabeth Rosenberg et al. “Maintaining America’s Coercive Economic Strength: Five Trends to Watch in U.S. Sanctions.”
- 26.
Donald J. Trump, “Remarks by President Trump on Iran Strategy” (speech, Washington, DC, October 13, 2017), https://www.whitehouse.gov/briefings-statements/remarks-president-trump-iran-strategy/.
- 27.
Donald J. Trump, “Remarks by President Trump on the Joint Comprehensive Plan of Action” (speech, Washington, DC, May 8, 2018), https://www.whitehouse.gov/briefings-statements/remarks-president-trump-joint-comprehensive-plan-action/.
- 28.
Michael R. Pompeo, “After the Deal: A New Iran Strategy” (speech, Washington, DC, May 21, 2018), https://www.state.gov/after-the-deal-a-new-iran-strategy/.
- 29.
SDN Designation prohibits US individuals or entities from carrying out business with a targeted individual and freezes their assets. See US Department of the Treasury, “U.S. Government Fully Re-imposes Sanctions on the Iranian Regime as Part of Unprecedented U.S. Economic Pressure Campaign,” November 5, 2018, https://home.treasury.gov/news/press-releases/sm541.
- 30.
Edward Wong and Clifford Krauss, “U.S. Moves to Stop All Nations from Buying Iranian Oil, but China Is Defiant,” New York Times, April 22, 2019, https://www.nytimes.com/2019/04/22/world/middleeast/us-iran-oil-sanctions-.html?module=inline.
- 31.
David E. Sanger, Edward Wong, Steven Erlanger, and Eric Schmitt, “U.S. Issues New Sanctions as Iran Warns It Will Step Back From Nuclear Deal,” New York Times, May 8, 2019, https://www.nytimes.com/2019/05/08/us/politics/iran-nuclear-deal.html?module=inline.
- 32.
Harrell, Rosenberg et al. “Maintaining America’s Coercive Economic Strength.”
- 33.
Heiko Maas, “Wir lassen nicht zu, dass die USA über unsere Köpfe hinweg handeln,” Handelsblatt, August 21, 2018, https://www.handelsblatt.com/meinung/gastbeitraege/gastkommentar-wir-lassen-nicht-zu-dass-die-usa-ueber-unsere-koepfe-hinweg-handeln/22933006.html?ticket=ST-4063567-aIa6bKbLVzkDb6jxc5ci-ap4.
- 34.
European Commission, “Commission Presents Ways to Further Strengthen the Euro’s Global Role,” December 5, 2018, http://europa.eu/rapid/press-release_IP-18-6643_en.htm.
- 35.
“France Urges Europe to Push Back Against ‘Unacceptable’ US Sanctions on Iran,” France 24, May 11, 2018, https://www.france24.com/en/20180511-iran-france-usa-europe-business-push-back-against-unacceptable-sanctions-nuclear-trump.
- 36.
European Commission, “Updated Blocking Statute in Support of Iran Nuclear Deal Enters into Force,” August 6, 2018, https://europa.eu/rapid/press-release_IP-18-4805_en.htm.
- 37.
“EU Mechanism for Trade with Iran ‘Now Operational’,” Deutsche Welle, June 28, 2019, https://www.dw.com/en/eu-mechanism-for-trade-with-iran-now-operational/a-49407662.
- 38.
Michael Lipin, “Exclusive: US Vows to Pursue Ship Owners Who Violate Iran Oil Sanctions,” Voice of America, March 19, 2019, https://www.voanews.com/middle-east/voa-news-iran/exclusive-us-vows-pursue-ship-owners-who-violate-iran-oil-sanctions.
- 39.
Tom McTague, “What the Iran Crisis Reveals About European Power,” The Atlantic, June 25, 2019, https://www.theatlantic.com/international/archive/2019/06/us-iran-sanctions-eu/592489/.
- 40.
Harrell, Rosenberg et al. “Maintaining America’s Coercive Economic Strength.”
- 41.
Richard Nephew, “The Hard Part: The Art of Sanctions Relief,” The Washington Quarterly, Summer 2018, https://www.tandfonline.com/doi/abs/10.1080/0163660X.2018.1484225?journalCode=rwaq20.
- 42.
Ellie Geranmayeh and Manuel Lafont Rapnouil, “Meeting the Challenge of Secondary Sanctions” (London: European Council on Foreign Relations, 2019), https://www.ecfr.eu/publications/summary/meeting_the_challenge_of_secondary_sanctions.
- 43.
Elizabeth Rosenberg, “Maximum Pressure on Iran Won’t Work,” Foreign Policy, April 26, 2019, https://foreignpolicy.com/2019/04/26/maximum-pressure-on-iran-wont-work/.
- 44.
Thomas J. Wright, All Measures Short of War: The Contest for the 21st Century and the Future of American Power (New Haven, CT: Yale University Press, 2017).
- 45.
Michael E. O’Hanlon, “The Senkaku Paradox: Preparing for Conflict with the Great Powers,” Brookings Institution, May 2, 2019, https://www.brookings.edu/blog/order-from-chaos/2019/05/02/the-senkaku-paradox-preparing-for-conflict-with-the-great-powers/?utm_campaign=Brookings%20Brief&utm_source=hs_email&utm_medium=email&utm_content=72319274.
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Belin, C., Denney, S. (2020). Business First: Trump’s Economic Measures as Offensive Weaponry. In: Quessard, M., Heurtebize, F., Gagnon, F. (eds) Alliances and Power Politics in the Trump Era. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-37258-3_11
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