Trump’s Tariffs are Replacing Sanctions

President Trump’s tariff announcement on 2 April marked a decisive break from the multilateral economic order the United States has led since the mid-20th century. This announcement served not just as a policy pivot, but as a deliberate effort to dismantle the liberal world order and replace it with a nationalist, transactional economic model. Critically, this reordering undermines the economic interconnectivity that gives sanctions their strength: shared financial systems, regulatory alignment, and interdependence. Less obviously, it points to another strategic shift. Tariffs, which Trump regards as revenue-generating tools, are now supplanting sanctions as America’s primary tool of coercive diplomacy. In effect, the Trump administration is signalling an almost complete de-prioritisation of traditional multi-national sanctions implementation and enforcement efforts.

For Europe, this shift presents both risk and opportunity. While it reduces Europe’s ability to rely on US-led enforcement, it also provides a clear mandate to invest in autonomous, strategically coherent sanctions enforcement capacity.

Confusion Reigns

Sanctions and tariffs serve distinct purposes. Put simply, sanctions are designed to restrict economic engagement for a country, business, or individual actor in order to achieve diplomatic or security ends. Tariffs, by contrast, are trade barriers aimed at protecting domestic industry by raising the cost of imports. The Trump administration does not appear to appreciate, or embrace, this distinction. Tariffs are being deployed as coercive diplomatic tools in ways traditionally reserved for sanctions, without the legal architecture, alliance coordination, or procedural checks that underpin formal sanctions regimes.

For example, in March, President Trump threatened to impose ‘secondary tariffs’ on any country continuing to import Russian oil if Moscow rejected a US-brokered ceasefire. The threat operated as a unilateral assertion of economic power, substituting the threat of sanctions for the threat of tariffs, in a context traditionally governed by multilateral diplomacy.

Also in March, the administration levied a 25% ‘secondary tariff’ on buyers of Venezuelan oil – a move explicitly designed to pressure third-party nations into alignment with US foreign policy objectives. For ;European governments and firms, the American unilateral fusion of trade and enforcement policy deepens compliance risk, creates overlapping regulatory burdens, and weakens the strategic coherence and coordination which typically serves as the bedrock of sanctions implementation.

The administration's quiet dismantling of the Department of Justice’s KleptoCapture Task Force, an interagency effort dedicated to seizing assets of sanctioned Russian elites, further validates the American shift away from serious sanctions enforcement (on Russia at least). It marks a retreat from resource-intensive enforcement in favour of more visible, unilateral pressure tactics, increasingly enacted through tariffs rather than multilateral sanctions regimes.

This is not a transition between two interchangeable enforcement models, it is an erosion of the institutional infrastructure underpinning economic diplomacy. The 2 April tariff announcement deepened this rupture. The new measures disrupted global supply chains, fractured transatlantic trade relationships, and further isolated the US from its allies. They also undermined the international interoperability needed for joint sanctions enforcement: shared financial oversight, coordinated reporting, and cross-border legal alignment. The White House’s 9 April decision to delay full tariff implementation for countries other than China may have softened the immediate impact, but it underscored the administration’s comfort with volatility and disregard for the frameworks that underpin transatlantic enforcement efforts.

Europe: From Partner in Sanctions to Subject of Tariffs

The risk this strategy poses to European partners is clear: without American commitment to multilateral sanctions implementation and enforcement efforts, sanctions become easier to circumvent and harder to defend. This erosion is already visible. Vietnam and Thailand, faced with erratic US tariffs, have moved closer to China, reducing their incentive to align with Western sanctions frameworks. Enforcement asymmetry has grown in recent years: the emergence of middle powers has stymied sanctions enforcement throughout the war in Ukraine. However, Trump’s tariff policy sharply accelerates the drift toward a global financial system increasingly non-aligned with the United States, diminishing both the reach and reliability of Western economic pressure.

As global trade fragments and alternative financial centres gain influence, sanctioned actors gain more opportunities to exploit weak points in the system. For instance, a Russian energy firm rerouting exports through Gulf intermediaries, or a sanctioned individual transacting via a third-country shell company, has historically faced far greater enforcement risk from the U.S. Office of Foreign Assets Control (OFAC) than from European regulators.

For Europe, this presents a direct challenge. While the EU can adopt sanctions through its Common Foreign and Security Policy, enforcement remains a national competence – marked by wide variation in capacity and political will. The UK, post-Brexit, has built an autonomous framework, but faces significant budgetary constraints in scaling investigations and sustaining enforcement momentum.

If Europe fails to strengthen institutional coordination and develop autonomous enforcement tools, the legitimacy and effectiveness of sanctions as diplomatic instruments will erode.

Two priorities are critical. First, enforcement capacity: sanctions require shared intelligence, transparency, and robust oversight. As US enforcement becomes more selective, European enforcement institutions must enhance their ability to detect evasion and apply penalties independently. Second, coordination: enforcement remains fragmented across national agencies. Without a centralised enforcement body comparable to OFAC, neither the EU or the UK has the tools to ensure consistency or impose penalties at scale.

This is not a new insight, but it is newly urgent. The absence of a coordinated European enforcement framework, combined with inconsistent political will, weakens the continent’s strategic leverage. Remaining passive as US policy grows more erratic is no longer a viable option.

A European Sanctions Authority would unify enforcement, clarify guidance for firms, and deliver penalties with speed and consistency. In the UK, the Office of Financial Sanctions Implementation (OFSI) must be scaled and empowered to play a leadership role.

If Europe remains reliant on an American strategy that no longer reflects multilateral principles, they risk becoming reactive actors in a global system being shaped elsewhere. The foundations of sanctions effectiveness – legal coordination, financial transparency, and regulatory alignment – are being steadily dismantled.

In a fragmented economic landscape, credible and autonomous enforcement is not a luxury. It is a strategic necessity. Europe must not just respond to this new terrain. It must re-shape it.

© Shilo Grayson, 2025, published by RUSI with permission of the author.

The views expressed in this Commentary are the author's, and do not represent those of RUSI or any other institution.

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