Russia Bill Broadens Sanctions but Could Fuel Fears Over the Dollar

A Russia sanctions bill is posing a dilemma for the Trump administration: Lawmakers are pushing to wage further financial warfare just as the administration worries that heavy use of sanctions may erode the U.S.dollar’s supremacy.The bill, which was the brainchild of Senator Lindsey Graham before his death, aims to impose mandatory sanctions on Russia and its allies and potentially broaden the reach of penalties to include tariffs on buyers of Russian energy.

The White House has said that the scope of the sanctions could broaden to include Iran and Hezbollah.Republicans and Democrats have expressed optimism that the bill could become law this summer.The policy underscores the complicated balance that the United States faces as it tries to leverage America’s economic might to reach diplomatic goals without weakening the nation’s position as the center of the global financial system.

The legislation is coming just as the Trump administration is overhauling its sprawling sanctions program over concerns that the heavy use of financial warfare has made American statecraft less effective.Despite a renewed effort to squeeze Iran’s economy in response to a faltering cease-fire, the Treasury Department has in recent weeks been quietly culling its list of sanctions designations, removing dead people, decommissioned vessels and individuals who no longer pose a threat to national security.The United States has also eased sanctions on Venezuela and temporarily issued sanctions exemptions allowing the sale of Russian and Iranian oil.And this month, President Trump called for lifting sanctions on Turkey so that it could purchase American fighter jets.U.S.

sanctions effectively cut individuals and companies off from the Western financial system because the dollar is the primary currency for conducting global transactions.There is growing concern within the Trump administration about the possibility of a global shift away from the dollar, with increasing use of China’s...