New Russia sanctions bill poses big problem for Trump administration as lawmakers look to take tougher action against Russia RussiaThe White House is concerned that using too many sanctions could weaken the dollar’s global influence. The bill was originally introduced by Senator Lindsey Graham before his death. This would make sanctions against Russia mandatory, not optional.
The bill could also punish countries that buy Russian oil and gas by imposing tariffs on them. The White House said the scope of the bill could later be expanded to include sanctions on Iran and Hezbollah. Both Republican and Democratic lawmakers believe the bill has a good chance of becoming law later this summer.
Russia Sanctions Act
According to the New York Times, the most worrying thing is that the United States uses financial sanctions as a powerful foreign policy tool, but using financial sanctions too frequently may encourage other countries to stop relying on the U.S. dollar. The Trump administration is currently reviewing and changing the U.S. sanctions regime because officials believe excessive sanctions may become less effective over time.
In recent weeks, the U.S. Treasury Department has quietly removed many names from the sanctions list, including those of deceased persons, older ships that are no longer in use and those no longer considered national security threats. The United States has also eased some sanctions on Venezuela. It temporarily allows sales of Russian and Iranian oil through sanctions exemptions. President Donald Trump has also called for sanctions on Turkey to be lifted so that Türkiye can purchase U.S. fighter jets.
dollar risk
U.S. sanctions are extremely powerful because most international trade is conducted in U.S. dollars. When the United States sanctions someone, they often lose access to the global financial system. According to the New York Times, the government is concerned that countries subject to repeated sanctions may start using other currencies instead of the U.S. dollar. The two main options are China’s yuan and cryptocurrencies, both of which are increasingly used by some countries.
Countries subject to severe U.S. sanctions may turn to other currencies to avoid U.S. restrictions and reduce damage to their economies. The sanctions also create additional work for U.S. banks, as they must ensure they do not do business with blacklisted individuals or companies.
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According to the New York Times, U.S. Treasury Secretary Scott Bessent said that sanctions work best when they are targeted, proactive, and have clear goals and time limits. Bessant warned that sanctions continuing for years without changing a country’s behavior could create long-term problems that are difficult to predict.
sanctions and trade
The number of U.S. sanctions has increased dramatically over the past five years. Some 3,000 new sanctions were imposed in 2024. However, the number of new sanctions declined in 2025, as President Trump relied more on tariffs than sanctions to pressure other countries.
A research report by economists Gregor Matworth and Brent Neiman found that banks in countries under severe sanctions, such as Russia, Belarus, Kyrgyzstan and Myanmar, have shifted more business to the yuan, the New York Times said, citing a working paper from the National Bureau of Economic Research. The same study found that virtually no one outside of these heavily sanctioned countries is giving up the dollar.
According to data from the International Monetary Fund, about 57% of the world’s foreign exchange reserves are still held in U.S. dollars. even so, Trump administration Wants to ensure the U.S. dollar remains the world’s primary reserve currency. U.S. Treasury Secretary Scott Bessent publicly stated in an interview with CNBC that “the dominance of the dollar is critical.”
dollar global power
Bessant also said Venezuela and Iran could sell oil using U.S. dollar payments while they were granted temporary licenses. He even suggested that Russia could resume using the U.S. dollar after the war in Ukraine ended. The Trump administration is also considering expanding dollar swap lines with more countries. According to the New York Times, this will make it easier for these countries to obtain dollars for trade.
The goal of these swap lines is to reduce the need for U.S. allies to use China’s yuan or other currencies. As the Treasury Department removes some names from the sanctions list, more companies and countries are expected to lobby for their removal. During Trump’s first term, lobbyists with ties to his administration reportedly made millions of dollars helping clients get off U.S. sanctions lists.
Last month, the Treasury launched a new “reconsideration portal” to make it easier for individuals and businesses to request removal from sanctions lists. According to the New York Times, former Treasury Department official Claire O’Neill McCleskey said that efforts to modernize the sanctions system actually began under the Biden administration in 2024. She also said the Trump administration issued fewer new sanctions than the Biden administration in the wake of Russia’s invasion of Ukraine.
Trump’s dollar plan
The Treasury Department’s Sanctions Office has also seen several employee departures this year, including senior official John Hurley. Even as it reviews the sanctions regime, the Trump administration continues to view sanctions as an important diplomatic weapon. The United States has reinstated sanctions on Iran after the ceasefire agreement with Iran weakened. This week, the U.S. Treasury Department announced new sanctions on Iran’s weapons procurement network, the Islamic Revolutionary Guard Corps, and the shipping network they use to evade sanctions.
President Trump has repeatedly expressed concern that excessive use of sanctions could force more countries to abandon the dollar. Out of this concern, White House Ask lawmakers to ensure the president retains the authority to delay, suspend or lift sanctions during diplomatic negotiations.
According to the New York Times, Rachel Ziemba of the Center for a New American Security said that simply reducing sanctions is unlikely to prevent countries from gradually developing payment systems that do not rely on the dollar. She said the government has not yet clearly explained what other policies it will use to maintain the dollar’s dominance in the global financial system.
