Treatment Resistant
Even when they “work,” sanctions eventually backfire.
“Ill habits gather unseen degrees, as brooks make rivers, rivers run to seas.” – John Dryden
Proverbs achieve durability when they combine a kernel of truth with memorability, authority, and cultural fit. As a means of passing wisdom between generations, proverbs were quite useful, and it was only recently that storytelling was displaced by the internet as the primary means of transferring such knowledge. That good sailors aren’t made in calm seas, that the strongest steel is forged in the hottest fires, and that something that doesn’t kill you only makes you stronger are all metaphorical variants of the same proverb, close cousins of “if you come for the king, you best not miss.”
Such proverbs capture the essence of our main critique against the use of financial sanctions as a means of geopolitical coercion, for they rarely achieve their stated objectives. Even when they are superficially effective—against weak countries like Syria and Cuba, for example—the vast majority of the pain is borne by the broader population, making such levies financial weapons of mass destruction. When powerful countries are sanctioned, they respond in the same way a partially treated cancer might, emerging far stronger for the experience and in a fighting mood. Those doing the imposing rarely duck in time to dodge the boomerang as it returns.
Regular readers will recognize this as our core argument against using sanctions to stunt China’s semiconductor ambitions, given that it is an objectively powerful country more than capable of inventing its way around such temporary roadblocks. Huawei’s recent announcement of a new chip-design framework, which it claims can deliver transistor densities equivalent to 1.4-nanometer-class chips by 2031 without relying on cutting-edge extreme ultraviolet lithography tools, would seem to render current Commerce Secretary Howard Lutnick’s concern that China may already be in possession of such machinery rather moot. One way or another, China’s chip ambitions won’t be denied, and they will almost certainly leapfrog the best Western technology as a result.
It is also the foundation of our objections to the sanctioning of Russia, which—no matter how often British propagandists insist otherwise—is also a strong country. Here, the argument is even more straightforward, given that Russia’s all-important energy sector is the main target. Foolhardy attempts to restrain the volume of Russian oil and gas production were guaranteed to fail because of the higher global prices that invariably result, something we have been pointing out in vain since mid-2022. The world needs Russian energy more than Russia needs money, a conclusion the recent war in the Middle East made perfectly clear to all but the densest European Union (EU) leaders.
We return now with a near-perfect story that proves our main thesis beyond any reasonable doubt. It is a tale of the EU’s haphazard efforts to wean itself off Russian shipments of liquefied natural gas (LNG), which are themselves a stopgap measure to make up for lost gas delivered from the same country via pipeline at much lower prices. For Brussels, paying more for the same fuel isn’t bad enough. Let’s explore the reality those making the decisions would prefer you ignore.