Sanctions Fatigue: How Nations Are Dodging U.S. Economic Pressure—and What It Means for Global Power

Economic sanctions have long been a central instrument of U.S. foreign policy, used to punish, isolate, or influence countries deemed adversarial. But as Washington’s reliance on this tool expands, an unintended phenomenon is taking root: sanctions fatigue. Across the globe, governments are crafting creative ways to circumvent these restrictions, raising questions about the long-term effectiveness—and legitimacy—of U.S.-led sanctions.

In 2024 alone, the United States maintained sanctions on over 20 countries, from Iran and North Korea to Russia, Venezuela, and Syria. Yet, the global response is shifting. A growing bloc of nations is actively diversifying trade partnerships, developing alternative payment systems, and openly challenging the dominance of the U.S. dollar.

Is the era of unilateral economic pressure coming to an end?

The Overuse of Sanctions—and the Global Blowback

According to the Council on Foreign Relations, the U.S. has increasingly turned to sanctions in the post-9/11 era, using them as a preferred alternative to military intervention. However, experts now warn that overuse has made them less effective and more controversial.

A 2023 report by the Atlantic Council noted a critical shift: instead of crippling economies, many sanctioned countries have become more resilient, building regional alliances and strengthening state control over critical industries.

This is especially visible in the case of Russia, which, despite unprecedented Western sanctions following its 2022 invasion of Ukraine, has managed to keep its economy afloat by boosting trade with China, India, and the Middle East.

The Rise of the Sanction-Resistant Economy

1. Russia: Pivoting East

Russia has aggressively realigned its trade and financial systems. It has increased energy exports to China and India, conducted deals in yuan and rupees, and joined platforms like the Cross-Border Interbank Payment System (CIPS) to reduce dependence on SWIFT.

In 2024, Reuters reported that over 60% of Sino-Russian trade was settled in yuan. Moscow also partnered with Iran and Turkey to discuss the creation of a regional payments architecture, bypassing Western banks altogether.

2. Iran: Decades of Experience

Iran, under sanctions since 1979, has long honed its skills in sanctions evasion. It uses front companies, bartering systems, and ships that disable GPS tracking to move oil undetected.

The country recently expanded ties with China under a 25-year strategic partnership, and in 2023, joined the Shanghai Cooperation Organization (SCO)—a move viewed by many as symbolic resistance to U.S. pressure.

3. China: Hedging Against the Dollar

China isn’t under major U.S. sanctions, but it’s preparing as if it could be. The Chinese government has boosted its digital yuan, increased gold reserves, and encouraged state firms to reduce exposure to dollar-denominated assets.

According to a Bloomberg analysis, Beijing sees de-dollarization as a long-term strategic imperative, especially as tensions with Washington escalate over Taiwan and tech restrictions.

Alternative Systems Challenging U.S. Dominance

1. BRICS and the Push for a New Reserve Currency

The BRICS bloc (Brazil, Russia, India, China, and South Africa)—now expanded to include countries like Iran and Saudi Arabia—is working on developing a new currency backed by commodities like gold, oil, and rare earth metals.

While progress is slow, the initiative reflects broader dissatisfaction with the U.S.-centric global financial system. At the 2024 BRICS Summit in Cape Town, several leaders echoed the sentiment that "economic sovereignty must not be hostage to geopolitics."

2. Digital Currencies and Blockchain

Several countries, including Nigeria, Russia, and China, are experimenting with central bank digital currencies (CBDCs). These tools could eventually allow states to trade directly without intermediaries, making it harder for U.S. sanctions to intercept funds.

Blockchain also enables peer-to-peer exchanges with limited traceability, which actors like North Korea have already exploited for cybercrime revenue, according to Chainalysis.

3. Barter and Bilateral Agreements

Sanctioned nations are reviving non-dollar bilateral trade deals. For instance:

• Venezuela has bartered oil for medicine with Cuba.

• Iran trades oil for food with Iraq and Afghanistan.

• Russia and India are exploring rubles-to-rupees mechanisms for arms and commodities trade.

Consequences of Sanctions Fatigue

While some experts view these workarounds as merely temporary, others warn of a long-term fracturing of the global economic order.

“The more the U.S. uses sanctions as a go-to tool, the more incentive other countries have to build parallel systems,” says Eswar Prasad, a senior fellow at Brookings Institution.

Here are the implications:

• Reduced U.S. Leverage: Sanctions only work if the U.S. financial system remains indispensable. The more countries find alternatives, the less influence Washington wields.

• Global Fragmentation: Multiple economic systems may reduce efficiency, transparency, and global cooperation.

• Empowered Authoritarian Regimes: Countries like Russia and Iran can portray themselves as victims of Western hegemony, rallying domestic and international support.

• Erosion of the Dollar’s Status: While still dominant, the dollar faces real competition from the yuan, gold-backed tokens, and possibly future BRICS or Gulf currencies.

Is Reform or Diplomacy the Answer?

Experts increasingly argue that indiscriminate, long-term sanctions may backfire—hurting civilian populations more than governments, and undermining diplomatic leverage.

Calls for reform include:

• Time-bound sanctions with clear benchmarks for removal

• Multilateral enforcement via the UN or WTO for legitimacy

• More emphasis on diplomatic engagement over economic coercion

Even U.S. allies like the European Union are re-evaluating their roles in sanction regimes, especially after the fallout from Russian energy bans. The European Council on Foreign Relations warned that Europe must not become “collateral damage” in U.S. economic warfare.

Final Thoughts: A Tipping Point in Global Finance?

The world is entering a post-unipolar financial era. While U.S. sanctions will remain a powerful geopolitical tool, their overextension has catalyzed global pushback, innovation, and resistance.

From de-dollarization to digital currency experiments, countries are showing they will not sit idly by as their economies are throttled by foreign decisions.

Whether this leads to a more balanced global order—or further fragmentation—remains to be seen. But one thing is certain: sanctions are no longer a one-size-fits-all solution, and fatigue is turning into action.