International Trade and America's Place in the Global Economy - Sanctions

The United States has used trade sanctions (stopping some or all forms of trade with a country) as a political tool against nations that are thought to violate human rights, tolerate drug trafficking, support terrorism, and, most recently, with nations that are suspected of producing or storing weapons of mass destruction. In recent decades the U.S. has imposed trade embargoes on countries including Iraq, Cuba, and North Korea. The United States has also restricted trade with Burma, Iran, Libya, Sudan, and Syria. Because of the immense size of the U.S. economy, the effect of sanctions can be crippling.

The Trade Act of 1974 allowed the United States to impose sanctions on countries with unfair trade policies. The Jackson-Vanik amendment to this legislation barred the president from granting favorable trade status to countries that limited emigration, requiring annual certification for communist countries, including China. This amendment was repealed in 2000, marking a major step in the restoration of relations between China and the United States. The Chinese market presents an enormous opportunity for U.S. exports, but it has remained difficult to penetrate by U.S. exporters. On December 11, 2001, China was admitted as a member of the World Trade Organization (WTO).