Economic sanctions, embargoes, and tariffs, oh my! The waters of foreign policy can get muddy. However, keep your definitions clear by getting a simple economic sanctions definition along with finding out what examples of sanctions are.
What Are Examples of Economic Sanctions?
Economic Sanctions Defined
Political leaders have a lot of different tools in their tool belt when it comes to running a country. Economic sanctions are just one of them. To keep it simple, an economic sanction takes away some form of trade or financial relations from a country. It’s used to moderate country behavior or even to punish a country acting out of order.
For example, if a government is oppressing its people or committing genocide, the United Nations will use economic sanctions as a way to punish that country. Economic sanctions work because they take resources and finances away from them affecting the stability of their economy.
What Are Examples of Sanctions?
Just like tools have all kinds of purposes, different economic sanctions are used in different situations. Therefore, there are a variety of economic sanctions available. View specific economic sanctions used around the world.
Embargoes are used to restrict trade items. Embargoes are everywhere. However, one item banned by multiple countries around the world is the trade of military items into specific countries. For example, the European Commission has an embargo on the export of weapons and related materials to the Central African Republic. This restriction is part of the targeted measure by the United Nations to prohibit arms in those countries fueling violence.
The word tariff might sound familiar because it’s always in the news. Tariffs are a tax imposed on imported goods. For example, many imported agricultural goods to the U.S. have a tariff. In 2020, China and the U.S. had multiple changes to their tariffs on goods imported and exported between the two countries.
You might know that a government can freeze its citizens' assets. But they can also freeze the assets of citizens of other countries or even whole countries. For example, the U.S. has frozen the assets of Iran in response to terrorism and violence.
Monetary dealings with other countries are important. This makes financial prohibitions successful. Financial prohibitions are when a country prohibits citizens from doing financial business with specific countries. For example, Canada has financial prohibitions with Russia. This includes but is not limited to land and services provided by specific Russian citizens.
Who Can Impose Sanctions?
Government leaders have the right to impose economic sanctions. However, organizations composed of several individual governments, like the United Nations or the European Commission, can also impose economic sanctions against countries or regimes they feel are promoting violence, violating human rights, or supporting terrorism. For example, the United Nations has imposed several economic sanctions against countries like Haiti and Iraq.
Pros and Cons of Economic Sanctions
While economic sanctions are a valuable economic tool, they do come with pros and cons for governments.
The benefits of economic sanctions include:
effective foreign policy tool
changes specific behaviors of some governments
destabilizes violent regimes
can create positive relationships
The costs of economic sanctions include:
slows technological progress
affects country to country business
expensive for businesses and workers
However, the cost or benefit of an economic sanction depends on the aim. While it's noted that economic sanctions only have about a 30% success rate, small economic sanctions between two countries with a relatively good relationship can be positive. However, economic sanctions imposed on a violent regime or unstable leader can result in war.
The Fine Line of Economic Sanctions
Economic sanctions are different restrictions or bans that one country makes on another. They can include anything from banning the trade of military items to regulating technology coming in from a country. While economic sanctions can be an effective political tool in foreign policy, they are a double-edged sword with serious consequences. For more information on economic policies, explore examples of trade embargos.