Analysis of US Economic Sanctions: Their Impact and effectiveness
In international relations, sanctions reflect a compromise, being more powerful than simple verbal condemnation, yet less serious than using aggression. As a matter of fact, sanctions include a broad range of measures, ranging from trade embargoes to bans on Olympic Games involvement. Sanctions can be classified into military, economic, diplomatic or travel. Trade restrictions are generally designed to minimize trade: imports or exports, or even both. Economic sanctions might also limit commerce by restricting foreign exchange, investment, and credit to the targeted nation.

This article illustrates the effects and effectiveness of US economic sanctions on the bilateral trade movement.

The emergence of economic sanctions

Economic embargoes emerged in the middle of state-policy discussions in the US. After a temporary slowdown following the catastrophic grain blockade and pipeline embargoes in the 1980s, sanctions are again the preferred weapons for dealing with “rogue” countries. They are used for implementing a variety of US international policy goals including combating terrorism to fighting drug smuggling.

Away from the real impact of

Impact on global trade

It is critical to have a clear picture of the benefits and cost of trade sanctions for the US in a globally interconnected economy. Most studies on the effectiveness of trade sanctions indicate that they have limited benefit in influencing the conduct or the administration of target nations. According to a study by the Institute for International Economics, US sanctions had produced desired results in less than 20% of the cases in the 1970s and 1980s.

Impact on US corporations

Away from the real impact of trade sanctions on the target nation, many US businesspeople argue that the consequences of US embargoes go past targeted industries. They also claim that the impact continues even after the sanctions are removed because US companies are more likely to be considered “undependable suppliers”. Also, sanctioned states might stop purchasing from the US exporters even after sanctions have been lifted; thereby giving companies in other states a competitive edge in those sectors.



Furthermore, business lost in the wake of trade restrictions imply reduced exports after trade embargoes are removed because United States businesses won't manage to sell alternative components or associated technologies. Overseas companies may also start producing some US products and technologies to cushion themselves in the event of future US sanctions. Such residual consequences may go beyond the prohibited goods and even further than the period sanctions are enforced.

Unfortunately, unilateral US embargoes have yielded just 13 percent of the international policy targets in cases where they have been enforced since 1970. Besides the effects the continued collapse might have on the US regime's reputation, some studies have shown that trade sanctions cost America between $14 billion and $20 billion per year in goods manufactured for export. This effectively translates into approximately 200,000 or more lost jobs in the manufacturing sector.

Bottom line

Trade embargoes deny United States revenues from commerce and also punish exporters who are among the most advanced and profitable in the US economy. As the US sanctions have grown and spread widely over the last twenty years, they have also contributed to the rising tensions between the US and its allies as well as her trading partners across the globe. The general view is that sanctions rarely succeed, they are economically and politically damaging and their use should be restricted.

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