​​Sanctions have long been the United States’ favored diplomatic weapon. The Biden administration’s response to Russia’s invasion of Ukraine is a case in point: it immediately imposed a raft of punitive economic measures on Moscow and rallied other governments to do the same. That sanctions are a popular tool of U.S. policymakers makes sense. They fill the void between empty diplomatic declarations and deadly military interventions. Yet the golden days of U.S. sanctions may soon be over.

As Washington has come to rely more and more heavily on sanctions, many rogue states have begun to harden their economies against such measures. Three events over the past decade in particular have convinced them to do so. In 2012, the United States cut Iran off from SWIFT, the global messaging system that enables virtually all international payments, in a bid to isolate the country financially. Other U.S. enemies took note, wondering whether they might be next. Then, in 2014, Western countries imposed sanctions on Russia after it annexed Crimea, prompting Moscow to make economic autonomy a priority. Finally, in 2017, Washington started a trade war with Beijing, which soon spilled over to the technological sector. By restricting the export of U.S. semiconductor know-how to China, the United States put its adversaries on notice that their access to crucial technology could be severed.

These three episodes have fueled the emergence of a new phenomenon: sanctions resistance. The United States’ power to impose sanctions on other countries derives from the primacy of the U.S. dollar and the reach of U.S. oversight of global financial channels. It makes sense, then, that enemies of the United States would seek out financial innovations that diminish these U.S. advantages. Increasingly, such countries have found them with currency swap agreements, alternatives to SWIFT, and digital currencies
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