A new Russia sanctions bill is creating a big problem for the Trump administration because lawmakers want tougher action against Russia, while the White House is worried that using too many sanctions could weaken the US dollar’s global power. The bill was originally proposed by Senator Lindsey Graham before his death. It would make sanctions on Russia mandatory instead of optional.
Event Context
The number of US sanctions has increased sharply over the past five years. Around 3,000 new sanctions were imposed in 2024. However, the number of new sanctions fell in 2025 because President Trump has relied more on tariffs than sanctions to pressure other countries.
Player Focus
Treasury Secretary Scott Bessent has said sanctions work best when they are targeted, aggressive and have clear goals and time limits, according to The New York Times. Bessent warned that sanctions left in place for many years without changing a country’s behavior can create long-term problems that are difficult to predict.
Team Analysis
In recent weeks, the Treasury Department quietly removed many names from its sanctions list, including dead people, old ships that are no longer used, and people who are no longer considered national security threats. The US has also eased some sanctions on Venezuela. It temporarily allowed the sale of Russian and Iranian oil through sanctions exemptions. President Donald Trump also called for lifting sanctions on Turkey so it could buy American fighter jets.
Last month, the Treasury Department launched a new “reconsideration portal” to make it easier for people and businesses to request removal from sanctions lists. Former Treasury official Claire O’Neill McCleskey said the effort to modernize the sanctions system actually began under the Biden administration in 2024, as cited by The New York Times. She also said the Trump administration is issuing fewer new sanctions than the Biden administration did after Russia invaded Ukraine.
The Treasury’s sanctions office has also seen several staff departures this year, including senior official John Hurley. Even while reviewing the sanctions system, the Trump administration still sees sanctions as an important diplomatic weapon. After the Iran cease-fire weakened, the US brought back sanctions on Iran. This week, the Treasury Department announced new sanctions targeting Iran’s weapons procurement network, the Islamic Revolutionary Guards Corps and its shipping network used to evade sanctions.
President Trump has repeatedly expressed concern that overusing sanctions could push more countries away from the US dollar. Because of this concern, the White House is asking lawmakers to ensure the president keeps the power to delay, suspend or cancel sanctions during diplomatic negotiations.
Rachel Ziemba of the Center for a New American Security said simply reducing sanctions is unlikely to stop countries from gradually developing payment systems that do not depend on the US dollar, as cited by The New York Times. She said the administration has not yet clearly explained what other policies it will use to keep the dollar dominant in the global financial system.
Match Outlook
The bill could also punish countries that buy Russian oil and gas by putting tariffs on them. The White House has said the bill’s scope could later expand to include sanctions on Iran and Hezbollah as well. Both Republican and Democratic lawmakers believe the bill has a good chance of becoming law later this summer.
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The goal of these swap lines is to reduce the need for U.S. allies to use China’s renminbi or other currencies. As the Treasury Department removes names from sanctions lists, more companies and countries are expected to lobby for their own removal. During Trump’s first term, lobbyists connected to his administration reportedly earned millions of dollars helping clients try to get off US sanctions lists.
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The biggest concern is that the US uses financial sanctions as a powerful foreign policy tool, but using them too often could encourage other countries to stop relying on the US dollar, according to The New York Times. The Trump administration is now reviewing and changing the US sanctions system because officials believe excessive sanctions may have become less effective over time.
US sanctions are extremely powerful because most international trade is done using the US dollar. When America sanctions someone, they often lose access to the global financial system. The administration fears that countries hit by repeated sanctions may start using other currencies instead of the dollar, according to The New York Times. Two major alternatives are China’s renminbi (yuan) and cryptocurrencies, which some countries are increasingly using.
Countries under heavy US sanctions may switch to other currencies to avoid American restrictions and reduce damage to their economies. Sanctions also create extra work for US banks because they must make sure they are not doing business with blacklisted people or companies.
A research paper by economists Gregor Matvos and Brent Neiman found that banks in heavily sanctioned countries like Russia, Belarus, Kyrgyzstan and Myanmar have shifted more of their business toward China’s renminbi, according to a National Bureau of Economic Research working paper, cited by The New York Times. The same study found that outside these heavily sanctioned countries, there has been very little movement away from the US dollar.
International Monetary Fund data shows that about 57% of the world’s foreign exchange reserves are still held in US dollars. Even so, the Trump administration wants to make sure the dollar remains the world’s main reserve currency. Treasury Secretary Scott Bessent has publicly said that “Dollar dominance is essential,” while speaking in a CNBC interview.
Bessent also said Venezuela and Iran were allowed to sell oil using dollar payments during their temporary licenses. He even suggested Russia could return to using the US dollar after the Ukraine war ends. The Trump administration is also considering expanding dollar swap lines with more countries. This would give those countries easier access to US dollars for trade, according to The New York Times.
