Last week, Congress limited the president’s ability to roll back sanctions against Russia. The bill was a pre-emptive strike against President Trump, who has expressed a desire for warmer relations with the country. On Sunday, Russian President Vladimir Putin responded by kicking out 755 American diplomats.
Although Russian interference in the 2016 election is the immediate cause of this battle over sanctions, the tug of war between Congress and Trump over sanctions policy is part of a century-long fight over who gets to decide how to treat the private property of citizens of hostile countries, one that has raged ever since Congress gave the president authority to unilaterally conduct economic warfare.
What began as a wartime necessity has become a permanent arsenal of economic weapons, affording the individual in the White House tremendous power to make policies that affect the daily lives of people around the world.
The legislative origin of our modern sanctioning state began six months after America entered World War I, when President Woodrow Wilson signed the Trading with the Enemy Act on Oct. 6, 1917. The act had two main goals: to hinder the enemy by preventing residents of Germany and Austria-Hungary from accessing their U.S. assets, and to bolster the Allied cause by investing those funds in U.S. Liberty bonds and by allowing U.S. companies access to the patents of Germany’s world-leading chemical industry.
The act was designed as a temporary wartime measure, but during the world conflict several amendments were added that allowed the administration to permanently confiscate German patents for the benefit of American businesses such as Dow Chemical and DuPont.
When the war ended, the Wilson administration broke earlier promises to return enemy property. Instead, it dipped into enemy funds to pay American claims against Germany.
Meanwhile, the act remained on the books.
The implications of this legislative survival became clear in 1933. When President Franklin D. Roosevelt, in an attempt to stabilize the banking system, proclaimed a “Bank Holiday” — forbidding all financial transactions to prevent a run on the banks — he turned for authority to Section 5(b) of the Trading with the Enemy Act, which granted the president the power to “investigate, regulate, or prohibit” all financial transactions involving foreign countries.
This justification was dicey. Had the wartime Congress of 1917 intended to grant the president vast authority over the domestic economy during times of peace? Roosevelt brushed off such criticisms. On March 9, a Democratic Congress amended the act to clarify that the president could invoke its powers “[d]uring time of war or during any other period of national emergency declared by the President.” (Emphasis added.)
From then on, if the president wanted to impose economic sanctions, all he needed to do was to declare the existence of a national emergency. During the Korean War in 1950, President Harry Truman declared such an emergency and put an embargo on North Korea and China. Truman’s state of emergency had no expiration date and would remain on the books for 25 years. Subsequent administrations would trot it out to provide legal justification for sanctions on Cuba, Vietnam and Cambodia.
In the wake of Richard M. Nixon’s 1970 secret invasion of Cambodia, Congress finally tried to claw back some of the extensive powers it had delegated to the president to wage both military and economic war. While the 1973 War Powers Act took on the former, a 1977 amendment to the Trading With the Enemy Act put new limits on the latter.
Now the act could be invoked only during an actual war. A 1977 law, the International Emergency Economic Powers Act (IEEPA) permitted the president to impose sanctions during peacetime, but it also required him to issue a fresh declaration of emergency each time he wanted to impose sanctions, and to justify this declaration to Congress. And although he could freeze foreign property, he could not permanently confiscate it.
These restrictions did not stick. The Supreme Court struck down many of the IEEPA’s limits on executive authority during the 1980s, and Congress has never again been so assertive about its own foreign affairs power. The result is that the president’s authority remains largely unchecked.
Counting those levied against Russia, the United States currently maintains 26 separate sanctions programs. While congressional legislation underpins some of these, the vast majority are the result of presidential action under the IEEPA. Sanctions today have become a normalized and mostly uncontroversial part of foreign policy.
But their effect can be dramatic. In the 1990s, a United Nations report became the basis of a widely-circulated claim that sanctions against Saddam Hussein’s Iraq resulted in the deaths of 500,000 children (the true figure, though still heartbreaking, was probably much lower). Less visible are the innumerable ways that sanctions interfere with the lived experience of daily commerce. For example, U.S. sanctions have punished an automobile manufacturer for leasing cars to Cuban diplomats in Canada, and have made it illegal for Iranian fitness teachers to become officially-licensed Zumba instructors.
While restrictions on trade and exchange may be justifiable in many cases, the broad range and impact of American sanctions reveal a potential for executive misuse or manipulation. Analysis of Congress’s recent actions should not be confined to Russia and the 2016 elections. It should instead prompt a broader discussion about the vast powers that the president continues to hold, powers that are often exercised with little public discussion. Revisiting the tangled and surprising history of the statute passed a hundred years ago might be a good place to start.