One year after taking office, President Trump declared on Twitter that “trade wars are good, and easy to win” in response to putting tariffs on steel and aluminium. Trump, who arguably became president in appealing to the downsides of unscrutinised free trade, has since been focused on renegotiating the balance of trade with various countries, with mixed results.
While the way in which this policy has evolved has made many nervous, this feeling has unfortunately not been elicited by another dangerous economic policy his administration has pursued: economic sanctions. For example, in the ratcheting up of the United States’ maximum pressure campaigns on ‘rogue’ nations, such as Venezuela and Iran, economic sanctions have been increasingly used to ‘change their behaviours.’ This policy of sanctions has long been favoured by many previous administrations, in Iran’s case due to many decades of long, sour relations with the United States.
Arguably though, it has become much worse and more dangerous than any tariff policy. Not all parts of Iran’s economy are affected – medical items are exempt. However, the stability of Iran’s structures has increasingly been challenged which naturally has on-going negative effects for the average Iranian citizen. Egregiously, Iranian oil has been made illegal to export worldwide, with countries caught buying any facing U.S. sanctions themselves, thus starving Iran (and others) of crucial trade.
Meanwhile, government officials and military personnel have been targeted too by having assets frozen, amongst other things, which understandably has led Iran’s president to state that they will not seek dialogue to resolve any differences until economic sanctions are removed. Essentially then, both nations are left to plan more punitive measures on each other (although one is clearly much more powerful than the other) which will likely spark into war the longer this situation continues.
This reality, while it might not be honestly acknowledged or taken seriously by recent United States administrations, was exactly what 19th Century economist Frederic Bastiat is thought to have expressed in the adage “when goods do not cross borders, soldiers will.” By preventing or frustrating trade, which in its very nature encourages dialogue and productivity, economic sanctions, and even tariffs, can be argued to be acts of war since they forcibly hinder these things.
This was certainly the case for helping get the United States involved in the First World War as it is questionable whether it would have joined in with the Triple Entente, against Germany’s allies, and changed the outcome of the war had it been able to trade with all the belligerent empires equally. Instead, it was confined to trading and associating with Britain’s allies, who were blocking access to German North Sea ports.
This concept is true too in the causes of the Second World War as worldwide tariff policies helped create some of the conditions for another horrific war. Simply, it would have been much harder for National Socialism to prevail in Germany had the economic conditions not deteriorated partly through the universal usage of tariffs by nations during the Great Depression. History lesson aside, there are other contemporary situations between Pakistan and India, Japan and South Korea, which, if viewed considering their respective diplomatic and military situations, also indicate Bastiat’s position to be true.
Kashmir being annexed by India has formally closed trade and strained diplomacy with Pakistan, leading to speculation of a military showdown. While not as much of a possibility over territory qualms, one can only wonder where Japan and South Korea’s trade war and historic difficulties will go considering regional tensions; this is perhaps a cause for Japan’s remilitarisation too.
The United States then (which in its own creation revolted from England partially for economic reasons) should at least show much more restraint in imposing, and encouraging, economic sanctions and recognise the fact that they will almost certainly backfire in two tragic ways. One: there are more wars sparked due to mistakes caused by the heightened tensions from past economic warfare, which inevitably leads to said nation’s ruination, future blowback, and another nail in the coffin of American liberty. Two: the sanctions unify the troubled nation, preventing the desired regime change, and the United States would be embarrassed by that nation gaining international solidarity or more diplomatic legitimacy. Naturally, others would be looking for and desiring a fairer world leader and would begin to take the United States less seriously, thus rendering the sanctions a useless tool. Iran, no doubt, would love nothing more than for the second option to eventuate after over half a century of trouble with America, let alone all of America’s other enemies.
All this, of course, completely ignores the fact that if economic sanctions are a tool for war then they should only be used in an actual war! But a lot else would have to change in Washington D.C. before this fact was ever recognised. Given the executive branches’ hoarding of national war powers, which it is not constitutionally allowed to wield without a congressional declaration of war, it would first be necessary to rein in the president’s power to do war. This does not mean that when there is a legitimate war that he should not oversee the military, or withgo sanctioning those whom the war is declared upon. Moreover, this would ensure that wars are treated with the seriousness they deserve to have and in the constitutional way. Right now, the United States is involved in seven undeclared conflicts, and another 31 documented conflicts have also been unconstitutional since the Second World War. No doubt many of them began with unnecessary and baiting sanctions, accompanied by dodgy allies.
And, while on the subject of congressional responsibilities, congress should also be much more careful about the implications of legislation that deals with economic and foreign policy issues. One way of doing so, and this again is in line with Bastiat’s adage, is to carefully consider the real implications for the citizenry of the United States. Will the average person be better off because congress has economically restricted or put tariffs on another country? Will anyone be safer because congress blocked Iran from selling oil (like any other country would normally be allowed to do)? Other questions of a logical nature would be good to evaluate, but until Congress radically changes its attitude, along with the American people who voted for them, there is no certainty on whether they will give sanctions the caution they deserve and recognise the real pain and risk of war they cause when used.
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