War, Embargo or Nothing: US Sanctions in Historical Perspective

Daniel W. Fisk is deputy director of the Kathryn and Shelby Cullom Davis Institute for International Studies at the Heritage Foundation, Washington, D.C. The views expressed here are his own and do not necessarily reflect those of the Heritage Foundation.

 

A

recent critique argued that “the widespread use of economic sanctions constitutes one of the great paradoxes of contemporary American foreign policy”. The alleged paradox is that, at a time when sanctions “are fast becoming the policy tool of choice for the United States in the post–Cold War world”, there exists a general political consensus that “economic sanctions don’t work”.¹

 

Quite apart from the question of whether such a consensus exists, a greater paradox would seem to be that the largest global trading nation—and a nation that has historically prided itself on promoting freedom of the seas and free trade—is also a proponent of the use of international instruments of economic coercion. This apparent contradiction, however, should not be surprising.

 

Promoting trade while enacting sanctions is one of those paradoxes which often underlie American foreign policy. Throughout its history, the United States—as the “first new nation”—has experimented with, adopted, rejected and re-embraced a range of foreign-policy approaches. US foreign policy has been pushed and pulled by contradictory impulses.

 

We embrace contradictory principles with equal fervor and cling to them with equal tenacity. Should our foreign policy be based on power or morality? Realism or idealism? Pragmatism or principle? Should its goal be the protection of interests or the promotion of values? Should we be nationalists or internationalists? Liberals or conservatives? We blithely answer, “All of the above.”²

 

These tensions between the philosophical underpinnings of America’s role in the world are not new to the twentieth century; they have been debated since the birth of the American republic, as well as during the colonial period. These debates are further influenced by a federal governmental structure built on separate branches of government sharing policymaking power.

The Founding Fathers

The use of embargoes as tools of foreign policy was discussed explicitly by the Founding Fathers of the United States. James Madison, the “father of the Constitution”, and Thomas Jefferson, the author of the American Declaration of Independence, were strong advocates of using commercial weapons as tools of diplomacy generally, seeing them as a better alternative to war as instruments for defending American interests. In an 1805 letter to Jefferson, Madison concluded, “[T]he efficacy of an embargo … cannot be denied. Indeed, if a commercial weapon can be properly crafted for the Executive hand, it is more and more apparent to me that it can force nations … to respect our rights.”

 

Jefferson, when serving as the third president of the United States, noted in 1808 that in foreign policy “three alternatives alone are to be chosen from. 1. Embargo. 2. War. 3. Submission and tribute”. Both Madison and Jefferson were shaped by the experience of the American colonial period, and both promoted the use of commercial leverage as the foreign-policy instrument of first resort in the young US government. Madison, as a member of the first House of Representatives in 1789, lobbied for the broad use of commercial leverage. He was aided in this effort by Jefferson, then secretary of state in the administration of George Washington, the first US president. They were not lone voices in this effort. According to the Encyclopedia of American Foreign Policy,

 

Most members of Congress were convinced that the United States could wield economic weapons effectively. They remembered that the British had repealed the Stamp Act and the Townshend Acts at least partly in response to boycotts .... [S]everal Southern leaders believed devoutly that commercial weapons such as embargoes could be America’s primary diplomatic weapons.

 

The experience of the North American colonies and these leaders prior to declaring independence from Britain contributed to this belief in the utility of economic sanctions as an effective means of achieving political ends. Opposition to the Stamp Act of 1765 and to the Townshend Act of 1767 had a strong influence on the Founders’ thinking on the utility of economic embargoes.

 

In the wake of the Seven Years’ War—or as it is known in America, the French and Indian War—the British government concluded that the American colonies should pay for their own defence, including the costs of stationing British regulars in the colonies. The Stamp Act and Townshend Acts were approved by Parliament as revenue-raising measures. The Stamp Act generated revenue by requiring a stamp embossed by the Treasury Office on paper used for documents and other products. These included documents used in court proceedings, papers for professional licences, college diplomas, land deeds, mortgages, contracts and bills of sale, as well as playing cards, pamphlets and newspapers. The Townshend Act imposed new import duties on specific goods and strengthened the powers of enforcement.

 

These assertions of Parliament’s authority over the colonies were met with colonial opposition. In the case of the Stamp Act, opposition ranged from resolutions and the burning of stamped papers, to riots and acts of violence against tax officials. One of the most effective measures of opposition to stamped paper was the development of the tactic of non-importation, which involved the agreement of colonial merchants not to import British goods. One critical target of this tactic was British merchants and manufacturers, who felt the direct consequences of the American boycott. This resulted in petitions to Parliament from British merchants and manufacturers, who expressly noted the importance of American trade for British prosperity. While there was a political element in Parliament’s decision to repeal the act, the economic impact was no less a basis for repeal.

 

The Townshend Act, coming in the wake of colonial opposition to the stamp tax, provoked the colonists’ return to the tactic of non-importation. The first action emerged in Boston with a pledge by citizens to boycott the purchase of British goods. Opposition spread to Rhode Island, where merchants pledged not to import specific British goods and citizens boycotted both British goods and local merchants who failed to observe the boycott. By late 1769, merchants in twelve of the thirteen colonies—New Hampshire being the exception—had organised active non-importation movements. It is estimated that this tactic caused British imports to the colonies to fall from £2.15 million in 1768 to £1.33 million in 1769. By 1770, most duties imposed by the Townshend Act had been repealed, with the tax on tea remaining. During their short existence, the Townshend duties had also encouraged violent resistance; it was while they were enforced that British troops occupied Boston, leading to the Boston Massacre.

 

The experiences of this period had the deeper consequence of furthering the colonies’ intellectual acceptance of formal independence. While prompted by numerous trade restrictions, the non-importation movement was ultimately about political rights, with the colonies using their economic leverage to defend their rights regarding representation, taxation, local administration and governance.

The Spirit of Commerce

Equally forceful was the colonial experience with commerce. From the earliest moments of colonial history, the European occupants of the New World were preoccupied with two things: their survival and the exploitation of benefits to be gained for themselves and the home country. Most colonies began as commercial enterprises, not political exercises. Both Yankee merchants and Southern planters were influenced by and reliant on international trade or, at least, trade with Britain. Hence, a “spirit of commerce” emerged in tandem with a “spirit of freedom and independence”.

 

As colonies, the Americans were subject to the vicissitudes and needs of British trade and foreign policy. For the Crown and its governmental ministers, the colonies were effectively under the administrative control of the Board of Trade and Plantations, which largely saw the colonies as a commercial structure and venture. “The aim [of English policy] was to benefit English trade, and to supply the home country with raw materials, but always for the enhancement of the English merchant or manufacturer.”³

 

To this end, the colonies were confronted with a number of restrictions on trade, dating from the mid-1600s. Various navigation acts restricted the transport of colonial and non-European goods to English-owned or -manned vessels, or enumerated what colonial commodities could be sold only to England or another English colony. Other acts assured a monopoly of trade in particular items to English merchants, prohibiting the import of non-English goods into the colonies. At various times, the colonists were subjected to restrictions on trade in beaver skins, furs, copper, hats, hops, canvas, timber, iron products, molasses, sugar and rum.

 

The English Crown’s restrictions on colonial trade resulted in an understandable scepticism about regulation. American colonial diplomat, inventor and printer Benjamin Franklin is attributed with having penned the following the observation in the 17 November 2024 edition of the Pennsylvania Gazette:

 

Most of the statutes or acts, edicts, arrets and placarts of parliaments, princes and states, for regulating, directing or restraining of trade, have, we think, been either political blunders, or jobs obtained by artful men for private advantage, under pretence of public good.

 

While the Crown attempted to regulate a range of economic activities, it did not inhibit the growth of an aggressive merchant culture that saw itself as a player in international commerce. Observers at the dawn of the nineteenth century noted the Americans’ interest in commerce. One foreign visitor concluded in 1788 that “commerce occupies all their thought, turns all their heads, and absorbs all their speculations”. New Yorker and Columbia professor Samuel Mitchill characterised his countrymen thus: “Their inclination and habits are adapted to trade and traffic. From one end of the continent to the other, the universal roar is Commerce! Commerce! At all events, Commerce!” This commerce included the “buying, swapping, shipping, and selling [of] goods in whatever way seemed most profitable … [Merchants] traded in whatever commodity would turn a likely profit … [They traded in] hundreds of things from scores of ports around the world”.⁴

 

Merchants and those engaged in international commerce, however, were not simply economic agents and leaders; they also became social and political leaders. And they believed that the “spirit of commerce”, a phrase used by Alexander Hamilton, contributed to another positive development for society: “[It] has a tendency to soften the manner of men and to extinguish those inflammable humours which so often have kindled into wars.”

 

The lessons of the colonists’ use of economic leverage against the Crown and the importance of commerce came together in the analysis of Thomas Paine in his pamphlet Common Sense. This essay articulated the colonists’ sentiment towards Britain and helped lay the intellectual foundations for American independence. Paine argued that “no nation in a state of foreign dependence” and “limited in its commerce” could ever achieve the potential wealth and stature which lay before the thirteen colonies if only they threw off the yoke of English rule. Paine argued that America’s “plan is commerce, and that, well attended to, will ensure the peace and friendship of all Europe, because it is in the interest of all Europe to have America a free port”. Paine, drawing upon the lessons learned from the non-importation movement, concluded that the denial of American goods to Britain was sufficient economic leverage to achieve independence.

 

The peace treaty that led to the independence of the thirteen colonies from Britain opened a new era in America’s international commerce and domestic economic development. It did not, however, end the tension between the pursuit versus the regulation of trade, as events in Europe, particularly the French Revolution and the resulting continental conflict, impacted on the new nation. Especially from 1794 through the declaration of war against Britain in 1812, the American republic attempted to balance its belief in freedom of the seas (and the expansion of its concept of “neutral” trade generally) with its use of economic instruments to influence European behaviour towards the new nation. The administration of George Washington found itself reacting to a congressionally imposed embargo against all belligerents, which quickly turned into a congressional effort to target specifically Britain, as the British had issued orders in council authorising ship and cargo seizures and the impressment of American sailors to the British navy.

Jefferson’s Choice

Friction with Britain, however, was not the only preoccupation of the young American republic. As the French Revolution evolved into the Napoleonic wars, tensions increased between the United States and France, reaching the level of an undeclared, or quasi-, naval war. The European conflagration tested the leadership skills of America’s first four presidents: George Washington, John Adams, Thomas Jefferson and James Madison.

 

Eventually Jefferson, one of whose principles was the defence of American interests through means other than war, concluded that the alternatives were “war, embargo or nothing”. Choosing the middle course, Jefferson asked Congress in late 1807 to authorise an embargo on all trade. By forbidding American vessels from leaving port and prohibiting foreign vessels from carrying goods out of American ports, Jefferson believed that Britain in particular would be adversely affected.

 

While Jefferson’s embargo policy caused significant harm to both Britain and France (in Britain, some distressed industries petitioned the government to remove the orders in council), the greater harm was measurable in its effect at home: “Ships rotted at their moorings; forests of bare masts sprang up in many harbors; grass grew on once bustling wharves; soup kitchens opened their doors; bankruptcies, suicides, and crimes increased.”⁵

 

In the end, five years of embargoes (closing US ports and criminalising exports), non-importation measures (excluding British and French imports until American rights were respected) and non-intercourse acts (prohibiting trade with Britain and France until American rights were respected) did not avert war. The record suggests that Jefferson clung to his belief that, given more time, his embargo policy would have achieved its objectives. However, by the spring of 1812, during the administration of Jefferson’s successor Madison, popular and congressional sentiment had turned to war as the only remaining option. Congress approved a ninety-day extension of the embargo against Britain as “a curtain-raiser for hostilities”.⁶

 

The enactment and enforcement of embargoes by Presidents Jefferson and Madison led to calls by the Federalists for constitutional amendments to limit “commercial embargoes, trade restrictions, and presidential power in general”.⁷ Those opposed to any restraints on trade were allied, for obvious reasons and not always comfortably, with those who believed that engaging in trade provided greater leverage than sanctions in influencing the behaviour of foreign governments.

Sanctions and the Constitution

These ongoing philosophical and policy debates about whether, when, or how to use trade as leverage in foreign policy are further complicated by a constitutional structure of government that vests control of foreign policy in more than one person or entity. The American Founders, having a strong distrust of government, devised a system of checks and balances among three separate and equal branches of federal government that keeps these debates alive, involving as they do the prerogatives and powers of the different branches, most notably the executive and legislative branches. For this reason, the Constitution is the framework through which to analyse what policymakers do and why they do it.

 

The Constitution assigns certain functions primarily to the president and certain functions primarily to Congress, including specific powers to the US Senate. Article II of the Constitution gives the president commander-in-chief power and the power to receive ambassadors (i.e., the power of diplomatic recognition). But it also gives the Senate a role in treaties and the appointment of US ambassadors. Article I of the Constitution gives Congress the power of the purse, power to raise an army and navy (and by extension, an air force) and power to regulate interstate commerce and set tariffs, but it must do so through legislation which is subject to the president’s veto.

 

The implications of this structure are indicated by a statement made recently by Senate Foreign Relations Chairman Jesse Helms in welcoming members of the United Nations Security Council to the US Capitol: “I know it has been suggested to some of you that the president alone speaks for the United States in foreign affairs. And in most of the nations of the world—even the great democracies—that is indeed the case. Not so in the United States.”⁸

 

The notion of the president alone being the formulator of US foreign policy is common among the public, the press and academics. It has even been enshrined in American jurisprudence by the Supreme Court. In the words of Justice Sutherland, the president is “the sole organ of the federal government in the field of international relations”.⁹ However, what has often been lost in discussions of Curtiss-Wright is that this case involved “not the question of the President’s power to act without congressional authority, but the question of his right to act under and in accord with an Act of Congress”.¹⁰

 

As noted by a well-respected treatise on constitutional law, “by constitutional exegesis, practical experience, and Congressional acquiescence, the executive has usually predominated the foreign affairs sphere, but this expansive international relations power is not plenary.”¹¹ In one sense, Congress’s recent activism has shown that it is no longer willing to acquiesce to the executive on all or even most foreign-policy questions. This activism is not a return to the days of the “war hawks” in Congress who pushed for war with Britain in 1812, but it is a reassertion of Congress’s role in making foreign policy.

A Fettered Presidency?

It is this structural dynamic that provides the framework for American debate on foreign policy generally and on the utility of economic sanctions specifically. It is a structure that raises the question of who decides US foreign policy. The executive branch dominated US foreign policy throughout most of the Cold War, but beginning in the 1970s and increasingly since the end of the Cold War, Congress has been a more active policy player.

 

Recent American presidents, from Carter to Clinton, have confronted Congress on the issue of economic sanctions. In September 1979, the New York Times magazine published an article entitled “Who’s In Charge of US Foreign Policy?” in which William D. Rogers, the former under secretary of state in the Ford administration, argued that Congress had been about “to wreck [President Carter’s] Africa policy” by its actions that year on Rhodesian sanctions. The Reagan administration subsequently was the target of congressional efforts to micro-manage foreign policy to the extent that some analysts concluded Congress had “fettered” the presidency. And under President Clinton, one observer has concluded that the institutional framework of separated powers, especially powers given to Congress, has turned the presidency from a “bully pulpit” into a “bullied pulpit”.¹² This process has curtailed the president’s power to use the Oval Office as a platform to set the national agenda and gain popular support for initiatives, instead creating a situation in which the executive is hard-pressed to effect its will in foreign policy.

 

Carter was perceived to have been undercut by Congress when it urged the lifting of the sanctions on Rhodesian minerals. Reagan was pressured into imposing sanctions on South Africa by Congress, led as much by his own Republican chairman of the Senate Foreign Relations Committee, Richard Lugar, as by any other political constituency. President Bush fought with Congress over the efficacy of sanctions as a response to Iraq’s invasion of Kuwait; Democrats, on the whole, supported continued sanctions instead of an earlier resort to military means to expel Iraq. A Democrat-led Congress also approved enhanced sanctions against Cuba over Bush’s objections.

 

President Clinton, heavily lobbied by the Congressional Black Caucus (CBC) to address a military coup in Haiti, resorted to sanctions as a first step. While this neither removed the de facto military regime nor satisfied the CBC, many of whose members favoured military action, sanctions were partly a reaction to congressional pressure to “do something”. Clinton has also struggled with Congress on the issue of increased sanctions against Cuba, Iran and Libya. Eventually, he approved measures expanding economic restrictions. Clinton has fought Congress on the appropriate policy towards Burma—with Congress favouring the use of economic isolation—and towards India and Pakistan following their nuclear weapons tests in 1998, with Congress again endorsing the use of economic leverage.

 

What these cases show is that there is a mixture of institutional and partisan elements at work. Carter was undercut by his own party, which had a majority in Congress. Reagan, too, differed with a partisan ally on South Africa. Bush and Clinton both dealt with partisan adversaries, although the recent congressional emphasis on sanctions began in 1993 when Clinton’s own party controlled Congress.

Business Opposition

The debate over the use of economic relationships—sanctions versus engagement—continues today in the United States’ relationships with China, Cuba, Libya, Iraq, Iran, Burma, India and Pakistan. This debate was also central to the implementation of policies towards the Shah’s Iran, Rhodesia and South Africa. In all these cases, the policy objectives generally have been shared; the point of dispute has been which use of trade—isolation or engagement—would be the most effective instrument in advancing the desired end.

 

The US business community—the merchants of today—has also been increasingly active in the sanctions debate. Motivated by the end of Cold War limitations, this group has successfully made the use of “sanctions” controversial, defining them very broadly to include:

 

arms embargoes, foreign assistance reductions and cutoffs, export and import limitations, asset freezes, tariff increases, import quota decreases, revocation of most favored nation (MFN) trade status, votes in international organizations, withdrawal of diplomatic relations, visa denials, cancellation of air links, and credit, financing, and investment prohibitions.¹³

 

This list leaves few options for the foreign-policy practitioner short of conveying diplomatic messages or sending in the marines, i.e., “words or war”.¹⁴ The business community is one of several non-governmental groups that have been active in recent sanctions debates. The Cuban Liberty and Democratic Solidarity Act (the Libertad or Helms–Burton Act) and the Iran–Libya Sanctions Act (ILSA) prompted an invigorated business lobby campaign against sanctions. This effort was countered, however, by human rights and ethnic lobby groups which urged the president and Congress to keep or strengthen sanctions.

An Enduring Theme

Contrary to common belief, neither the use of economic sanctions nor the accompanying political debate about their utility is a new phenomenon. This debate has continued since America’s colonial period, with both sides frequently laying claim to the same principles in support of their opposing conclusions. Specifically, the argument over economic sanctions versus “constructive engagement” has featured the ongoing contradictions that make up and reflect the larger issue of America’s role in the world, including the tensions between realism and idealism, power and morality, the protection of interests and the promotion of values. Underlying this debate about how and when to use trade as a foreign-policy tool is the more fundamental issue (as old as the American republic) of whether US trade policy should be an instrument of foreign policy at all or whether it should be distinct from (and immune from) broader US foreign-policy objectives.

 

The enduring attraction of economic sanctions is as a middle ground—as Jefferson said, as a something between war and nothing. Inaction in the face of affronts (or worse) to US citizens or barbaric campaigns or policies towards foreign peoples is often unthinkable, and current modes of communication make them hard to ignore or dismiss. Yet military action is an alternative that Americans generally are reluctant to employ. A sceptic of the efficacy of economic sanctions has observed that

 

a conspicuous theme in the theory and practice of American foreign policy [is] a faith in economic motives as a substitute for military force. Tom Paine’s Common Sense … brought into sharp focus a state of national opinion about foreign affairs which had been developing slowly for a century or more, and has remained alive ever since. From 1775 to this day, the American people and their government turn automatically to boycotts, embargoes, and other economic sanctions as ways to solve international conflicts.¹⁵

 

While subject to the vagaries of the international environment and the domestic political consensus within the United States, economic sanctions will continue to be an instrument to which American policymakers turn. They can be an effective foreign-policy tool. It is true that sanctions are imperfect, and they are not always the best or only tool available. When used, they should be adapted to fit the particular situation; they should not be a knee-jerk reaction to an international problem. Yet the same can be said of all foreign-policy tools. Certainly, the extremes of inaction (including efforts at “moral suasion” unsupported by the threat of action) and war are insufficient as sole options in the operation of foreign policy. Sometimes policymakers must acknowledge that doing nothing is better than war or embargoes. However, as the American Founders recognised, it would be foolish to ignore the utility of America’s economic leverage as a tool for advancing foreign policy, particularly in cases where that foreign policy is inextricably linked to national security interests.

Endnotes

1. Richard N. Haass, “Introduction”, in Economic Sanctions and American Diplomacy, ed. Richard N. Haass (New York: Council on Foreign Relations Press, 1998), p. 1.

 

2. Eugene V. Rostow, A Breakfast for Bonaparte: US National Security Interests from the Heights of Abraham to the Nuclear Age (Washington, D.C.: National Defense University Press/US Government Printing Office, 1983), p. 22.

 

3. Murray Rothbard, Conceived in Liberty, Volume II: “Salutary Neglect”: The American Colonies in the First Half of the 18th Century (New Rochelle, N.Y.: Arlington House Publishers, 1975), p. 205.

 

4. James MacGregor Burns, The Vineyard of Liberty (New York: Alfred A. Knopf, 1982), p. 221.

 

5. Thomas A. Bailey, A Diplomatic History of the American People, 10th ed. (Englewood Cliffs, N.J.: Prentice-Hall, 1980) p. 125.

 

6. Ibid., p. 139.

 

7. Burns, The Vineyard of Liberty, p. 231.

 

8. Matthew Vita, “UN Gets Helms-Eye View; Security Council Given a Tutorial on Senate’s Foreign Policy Role”, Washington Post, 31 March 2000.

 

9. United States v. Curtiss-Wright Export Corporation, 299 US 304; 57 Sup. Ct. 216 (1936).

 

10. J. Jackson, concurring opinion, footnote 2, Youngstown Sheet & Tube Co. et al. v. Sawyer (“the steel seizure case”), 343 US 579, 635; 72 Sup. Ct. 863, 870 (1952).

 

11. John E. Nowak, Ronald D. Rotunda and J. Nelson Young, Constitutional Law, 3rd ed. (St Paul, Minn.: West Publishing, 1986), p. 193.

 

12. See Sebastian Mallaby, “The Bullied Pulpit: A Weak Chief Executive Makes Worse Foreign Policy”, Foreign Affairs 79, no. 1 (January/February 2000).

 

13. Richard N. Haass, “Sanctioning Madness”, Foreign Affairs 76, no. 6 (November/December 1997), p. 74.

 

14. See Elliott Abrams, “Words or War: Why Sanctions Are Necessary”, Weekly Standard, 27 July 1998.

 

15. Rostow, A Breakfast for Bonaparte, p. 82.