The Waning Power of U.S. Sanctions

Editorial By Advocatetanmoy

India, China, and Russia Lead the Global Shift Against Dollar Dominance and Unilateral Sanction Regimes

For much of the post-Cold War epoch, the United States has operated as the linchpin of the global financial architecture, exercising unparalleled dominion through the deployment of economic sanctions. These sanctions, once perceived as surgical instruments of geopolitical discipline, have morphed into a blunted and increasingly ineffective apparatus in the face of resolute defiance from emergent powers. In a world undergoing a tectonic shift towards multipolarity, nations like India, China, and Russia are not merely enduring U.S. sanctions—they are actively undermining their efficacy, thereby recalibrating the balance of international influence.

The decline of American sanctions hegemony is neither incidental nor momentary. It is the cumulative outcome of long-gestating structural realignments, deliberate policy recalibrations by sovereign states, and the erosion of trust in the objectivity of U.S.-led global governance. The dollar’s ubiquity, once an unassailable foundation of sanction enforcement, is now the very fulcrum of international efforts to subvert unilateral coercive measures. Through strategies of de-dollarization, the establishment of alternative trade settlements, and the construction of parallel financial ecosystems, erstwhile targets of American sanctions are asserting their autonomy with an unflinching boldness.

India’s posture is particularly emblematic of this broader recalibration. As a rising power with an avowed commitment to strategic autonomy, New Delhi has refused to conflate partnership with subservience. Its calculated resistance to Western entreaties in the wake of the Ukraine conflict—manifested in its accelerated import of discounted Russian crude, the institutionalisation of the rupee-ruble trade mechanism, and its steadfast military cooperation with Moscow—underscores a maturation in foreign policy that privileges sovereign interest over compliance with an increasingly discredited sanctions regime. The specter of CAATSA (Countering America’s Adversaries Through Sanctions Act) loomed large, yet it failed to deter India’s procurement of Russian S-400 missile systems—signifying not impudence, but a rational repudiation of coercive diplomacy.

China’s defiance, by contrast, is not merely assertive but systemic. Engaged in a prolonged confrontation with the U.S. across trade, technology, and ideology, Beijing has constructed robust institutional and infrastructural alternatives to American financial levers. From the Cross-Border Interbank Payment System (CIPS), which serves as a nascent competitor to SWIFT, to the strategic internationalisation of the yuan, China is meticulously engineering a world in which Washington’s financial edicts hold diminished sway. Its unwavering commercial entente with Iran and Russia, despite expansive U.S. sanctions, reveals a calculus that economic self-interest and geopolitical parity outweigh fear of secondary penalties.

Russia, arguably the most sanctioned nation in modern economic history, has not merely survived the Western onslaught; it has pivoted with strategic deftness. The redirection of energy exports to willing partners in Asia, an assertive policy of import substitution, and increasing reliance on gold and cryptocurrency transactions have rendered sanctions less a stranglehold and more a spur towards resilience. The expectation that economic attrition would precipitate political capitulation in Moscow has proven naïve; instead, Russia’s economic realignment demonstrates that comprehensive sanctions, absent global unanimity, have become counterproductive relics of a bygone unipolar moment.

The implications of this shift are profound. The very edifice of American financial hegemony is being corroded from within and without. The weaponization of the dollar has paradoxically hastened the search for alternatives. BRICS nations are now contemplating a shared currency; the Shanghai Cooperation Organization is facilitating intra-bloc trade in local tenders; and numerous bilateral agreements are consciously designed to insulate against extraterritorial U.S. dictates. What is emerging is not a chaotic dismantling of global order, but the deliberate construction of a parallel, pluralistic one.

This transformation, however, is not merely technical or economic—it is epistemological. The assumption that the U.S. could impose its moral imperatives via fiscal instruments has been increasingly rejected by large swathes of the international community. Compliance is no longer a given; coercion no longer guarantees submission. For Washington, this ought to be a moment of sober introspection. Clinging to antiquated methods in an era of dynamic pluralism is tantamount to strategic inertia.

The twilight of the U.S. sanctions regime does not herald the collapse of American influence per se, but it unmistakably signals the end of its monopolistic leverage. If the United States is to remain a relevant architect of international norms, it must recalibrate its approach from command to consensus, from coercion to cooperation. Failure to do so will not merely diminish its standing—it may entrench a global order irrevocably insulated from its influence.

August 5, 2025