The Verdict: America's sanctions are losing their bite

Sanctions were once Washington’s economic weapon of last resort. Under Donald Trump, they are becoming a recurring instrument of pressure, against adversaries, trading partners and countries accused of helping them. The latest test is Iran, where Washington is betting that unprecedented economic pressure can succeed where military and diplomatic pressure have struggled. Treasury Secretary Scott Bessent says the United States is preparing measures unlike anything imposed before, while Defence Secretary Pete Hegseth says the naval blockade can be sustained indefinitely.

The objective is simple: squeeze Iran until the cost of defiance becomes unbearable. But there is a fundamental weakness in the strategy: economic pain does not automatically produce political surrender. Iran has endured years of sanctions and is now adapting again, even as the pressure damages its economy. Trump’s broader approach increasingly places tariffs and sanctions in the same coercive toolbox: raise the cost of access to American markets, finance and trade, then use that pain to force concessions. But that strategy carries a paradox. The more Washington weaponises economic power, the greater the incentive for others to build alternatives.

India is expanding trade relationships and seeking greater resilience in payments and supply chains. Europe, meanwhile, is increasingly looking at ways to reduce its vulnerability to American economic pressure. The point is not that these countries can simply replace the United States. They cannot. The point is that dependence creates leverage, and repeated coercion creates an incentive to reduce that dependence.

That is where the credibility of sanctions becomes critical. Sanctions work best when governments believe the rules are predictable, the coalition imposing them is durable and the cost of defiance outweighs the cost of compliance. If tariffs and sanctions are deployed too frequently, their shock can diminish, and countries have more reason to find workarounds. There is another problem: America itself pays a price. The Iran conflict has disrupted energy markets and pushed fuel costs higher, creating domestic pressure on Trump to deliver a result Americans can see as a win.

So, will sanctions bring relief to the United States? They can hurt adversaries. They can restrict trade, raise costs and squeeze governments. But if they fail to change behaviour while encouraging the world to diversify away from American economic power, Washington may win the battle and weaken its leverage for the next one.

The real question is not whether America can impose sanctions. It is whether America can keep weaponising economic power without making the world less dependent on America. Because when a weapon is used too often, the target eventually learns how to dodge the blow. That is the verdict.