Tariffs, quotas, embargoes, or prohibitions on particular products, services, or financial activities are just a few of the various ways these trade sanctions tend to be exercised. The imposition of trade sanctions are frequently utilized particularly as a nonviolent means of achieving diplomatic goals altogether.
Humanitarian and Economic Repercussions
Trade sanctions are more likely to frequently have negative economic and humanitarian effects on the targeted country or organization as well as on the companies and sectors that are residing in the respective countries that impose them.
What are the Notable Examples of Trade Sanctions?
American Sanctions Against Iran
Economic sanctions that were majorly imposed by the United States on Iran are among the most well-known instances in the history of trade sanctions. Trade sanctions were majorly intended to address the alleged support of Iran for terrorism and to curb its nuclear program which became much more severe with passing time.
Measures specifically included restricting the financial dealings with Iranian banks and reducing the oil exports of Iran as it was one of the vital sources of income. The economy of Iran experienced a severe contraction where its currency had a major devaluation and its inhabitants had experienced widespread economic misery due to these restrictions. Meanwhile, critics still consider that the sanctions have not been able to fully accomplish their intended policy goals in spite of these circumstances.
North Korea sanctions
There is another instance in the history of trade sanctions where the US, the UN, and other countries placed trade sanctions on North Korea where these measures targeted the violations of human rights and the nuclear weapons program being done by North Korea. These prohibitions did include freezing of assets which were on officials and entities, and prohibition on exports which included coal, textiles, and seafood as well. Trade sanctions of such a nature have not stopped the leadership of North Korea from pursuing its military and nuclear goals which has completely highlighted the difficulties in ensuring sanction compliance despite hindering the economic development.
Cuban Embargo
One of the oldest trade restrictions that have taken place in history was in the year 1960 when the U.S. put an embargo on Cuba. This particular embargo was put in place after the Cuban Revolution and later the nationalization of American-owned property happened which ultimately limited the travel, commerce, and financial interactions between these two countries. Critics contended after this embargo that it has disproportionately hurt Cuban civilians by restricting their access to products and hampering economic prospects, despite the fact that it was designed to put pressure on Cuba to implement democratic reforms. The embargo remained mostly in place even if some limitations were loosened during the Obama administration and then reinstituted as well.
Russia-related sanctions
Another important example of global trade sanction is the sanctions imposed on Russia. Western countries, particularly the U.S., EU, and Canada has imposed severe sanctions in the past on the account of invasion of Russia in the territory of Ukraine which happened in the year of 2022 and its annexation of Crimea in 2014. These limitations were particularly imposed on financial transactions, technological exchanges, and energy exports at the same time. Russia has attempted multiple times to tone down the consequences of these sanctions simply through fortifying its ties with non Western trading partners despite the fact that they have cut off Russia from international financial markets and caused economic disruption.
Challenges and Criticisms of Trade Sanctions
Humanitarian Concerns
Ordinary residents of that particular country are frequently getting impacted by the sanctions and end up resulting in the shortages of necessities like food and medication. Let us take an example of a sanction which was imposed on Iran in the year of 1990 which resulted in major starvation and health concerns as well.
Avoidance and Failure to Comply
Targeted organizations are more likely to frequently utilize the activities of smuggling, illegal commerce, or other financial networks in order to get around restrictions. Cryptocurrency has also become a viable means when it comes to circumventing the conventional financial constraints.
Limited Efficiency
Critics have contend on the account of sanctions that penalties hardly ever accomplish the political goals which they are actually meant to.
A Rebound in the Economy
Countries that are specifically involved in imposing the sanctions do have a tendency to face economic repercussions like the sanctions on Russia caused a large loss of revenue for European companies at the same time.