The New York Times reported on July 18: "The Trump administration is concerned that over-extensive sanctions against Russia might encourage more countries to abandon the use of the U.S. dollar, thereby weakening the dollar's dominant position in the global financial system. As a result, the United States is scaling back certain sanctions while striving to preserve operational flexibility in using sanctions as a diplomatic tool."
This report by The New York Times on July 18 closely aligns with recent revisions to the proposed Sanctioning Russia Act of 2026 currently under discussion in the U.S. Congress. On one hand, the U.S. government faces mounting pressure from both parties in Congress to intensify financial warfare against Russia; on the other hand, internal concerns—particularly within the White House and the Treasury Department—about potential damage to U.S. dollar hegemony are driving efforts to maintain greater policy flexibility within the sanction legislation.
For years, the United States has frequently leveraged the U.S. payment system for extreme sanctions, triggering risk concerns across multiple countries globally. This has spurred nations to accelerate diversification of their foreign exchange reserves and explore settlement in local currencies to avoid exposure to dollar transactions. Data shows that the share of the U.S. dollar in global foreign exchange reserves has reached its lowest level since 1995. The Trump administration fully recognizes that pressuring Russia is merely a tactical objective, while safeguarding dollar hegemony remains the strategic imperative. Overly aggressive sanctions not only fail to quickly undermine Russia but also push more countries to accelerate their 'de-dollarization' processes, threatening the dollar’s leadership role in the global financial system.
This strategic concern is directly reflected in the revisions to the Sanctioning Russia Act of 2026. Compared to the original proposal—which aimed at imposing a 500% tariff on all Russian energy buyers—the latest version has undergone significant pragmatic adjustments.
The New York Times report accurately captures the current ambivalence in U.S. policy toward sanctions on Russia. By scaling back some measures and seeking room for maneuver, the Trump administration is essentially aiming to extend the lifespan of dollar hegemony. This marks a shift where U.S. sanctions against Russia have transcended partisan divisions, forming a new institutionalized norm characterized by "verbal restraint, practical escalation," and heavy reliance on presidential discretion.
Original source: toutiao.com/article/1871149030694924/
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