Henry Farrell
When Donald Trump returns to the White House in late January, he’ll hold the levers of U.S. economic power. The ubiquity of the dollar as a currency of exchange, coupled with the centrality of U.S. financial institutions and networks, gives Washington an unparalleled ability to make it hard for adversaries to do business. Since 9/11, the United States has wielded financial sanctions at an increasing scale and scope, targeting individuals, governments, and nonstate actors. It has even turned export controls for technologies into a makeshift alternative for sanctions. The future of these tools—some of the most consequential the United States possesses—now resides with a mercurial president.
On the campaign trail, Trump insisted that sanctions were a poor tool compared with tariffs: he vowed to use them “as little as possible” for fear that they would kill the dollar as a world currency—an outcome as bad as losing a war, he claimed. That professed skepticism clashed with his record in office. In his first term, he was happy to slap sanctions on North Korea and deploy them in an effort to exert “maximum pressure” on Iran. Trump’s flip-flopping on sanctions is likely to spark disagreements in his next term. Many of the figures he is bringing into his administration, such as Senator Marco Rubio, the nominee for secretary of state, are proponents of sanctions. They will certainly want to train this major weapon of U.S. economic statecraft on their enemies. Others may be nervous about overusing sanctions, as Steven Mnuchin, the treasury secretary in Trump’s first administration, was. Some may even be actively hostile to the power of the U.S. dollar.
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