Four Points to Know About the Recent Sanctions Bill

The important aspects of the new sanctions bill that President Trump signed into law yesterday.



On Wednesday, President Donald Trump had signed one of the most consequential pieces of legislation in his presidency thus far! With the signing of the House’s sanctions bill, the US has put major pressure on Russia for their meddling in the 2016 presidential election, along with North Korea and Iran for their continuation regarding to their respective nuclear weapons programs. So how does President Trump feel about all of this?   



Yeah… as you can see, it’s complicated. Let’s break down the points that you need to know in better understanding the new sanctions bill.



Point #1: President Donald Trump was Reluctant to Sign the Sanctions Bill


While President Donald Trump did sign the sanctions bill that would be implemented against Russia, that doesn’t necessarily mean he was thrilled in doing it. From President Trump’s signing statement, he says that the new sanctions bill “encroaches on the executive branch’s authority to negotiate.” Which to be fair, isn’t wrong. In this new sanctions bill, Congress takes away President Trump’s power to remove sanctions over Russia.


Considering that the sanctions bill was passed by both Democrats and Republicans fairly easily, that put President Trump in the awkward position of backing a sanctions bill that he believes is going against powers given to him by the Constitution. Or in other words:



It’s obvious that the Russia-Trump story isn’t going anywhere, anytime soon. President Trump’s reluctant signing – in what usually would be a very easy political victory for any other US president – just puts that into even clearer perspective. As for Republicans in Congress, they clearly don’t trust President Trump to be tough on Russia, so in turn with the sanctions bill, they took the choice away from him.



Point #2: In the cases of Russia and Iran, sanctions look to have been an effective measure.


For many Americans, especially those that identify themselves as President Trump’s core base, the US imposing sanctions on their foreign adversaries have always been met with a healthy amount of skepticism. The truth is however, sanctions against both Iran and Russia have been remarkably effective thus far. But for very different reasons.


For Iran, sanctions have worked in curbing their nuclear program because it had slowed down Iran’s economy due to the slow growth of foreign investments into the country. This had various effects on the Iranian economy from the government having to refine their own gas (causing poor air quality in major cities like Tehran) to the cost of goods rising drastically, slowing down the country’s spending. According to the World Bank, Iran’s GDP has greatly contracted to almost 2-3% each year since stricter US sanctions have been put into place. In fact, Iranian leaders’ biggest complaints, regarding the US-Iran nuclear deal, are that Iran’s economy hasn’t bounced back as much as they had hoped it would from the removal of certain sanctions.



As for Russia, sanctions have specifically effected the upper-parts of Russian society; specifically the Russian oligarchs that have aligned themselves with the Putin Regime. For many of those Russian oligarchs, their money is currently held-up in American banks and other financial institutions. This includes Russian energy firms, which greatly effects exports of Russia’s deep-drilling technology that is utilized in deep-water gas and oil exploration. The energy sector happens to be a HUGE industry for the Russian government and its leaders. These sanctions also affect energy projects in Europe, but more on that in a bit.



Point #3: Will Sanctions Actually Curb North Korea’s Nuclear Program?


With the recent North Korea missile tests, that inch the country forward producing a nuclear weapon, it’s not surprising that the new sanctions bill would include North Korea. Yet the million-dollar question in regards to North Korea is a simple one; what does North Korea possibly have that the US can sanction? Considering North Korea’s only serious trade partner is China and most luxury goods are already being sanctioned, the question of sanctions being effective in curbing the country’s nuclear efforts looks to be a legitimate question.


Considering China is surrounded by US allies – South Korea, Japan, India, ect – their best interest has always been to prop-up North Korea from collapse. While many – including President Donald Trump – have publicly denounced China for not doing more; considering the overall financial instability of North Korea is believed to be real, any sanctions that would debilitate the country’s economy and threaten the stability of the regime would be out of the question for China.


If meaningful sanctions were ever to be put on North Korea, it would have to come from China, not the US.



Point #4: Europe Isn’t Happy About New Sanctions on Russia


It’s obvious that Russia would have major problems with the new US sanctions, what’s surprising though is Europe’s objections to them. Particularly regarding the energy sector. The sanctions bill allows the US to sanction any Russian energy company from either maintenance or development of export pipelines. This creates a major problem for a current energy project known as Nord Stream 2 (which creates a natural gas line from Russia to Germany) because it’s headed by a Russian energy company; Gazprom.


While European countries generally aren’t against Russian sanctions, in this particular case however – especially for France and Germany – this new sanctions bill effects their natural gas resources and also affects EU investors in Gazprom. Considering Europe is dependent on Russia for natural gas and oil exports, they can’t be too happy with the recent sanctions bill.



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