I'm so glad, Scott, that you asked this question. I think it's one of the most important questions that hangs over this whole area right now, and too few people are talking about it. I think that there's almost an irony that cuts across the broad narrative of my book, which is a major reason that the United States launched what I call the age of economic warfare in the time of Stuart Levy was because military force had lost its political support, not only in Washington, but also across the United States, to the point where, you know, I think even had George W. Bush during his second term made the case to the American people that we should be invading Iran to get rid of their nuclear program and install a democratic government, you would have had substantial opposition on both sides of the aisle to that kind of idea. So, in some ways, the rise of economic warfare was because the alternative military force had become politically unpalatable. The irony is that as we started using economic warfare against major powers, most importantly, China and Russia, the political risks of using these tools are on par with, if not more than, limited military warfare. Because at least with military warfare, you know, sometimes it's a limited subset of the population who serves in the military. You know, if you're fighting a limited war, you may not risk that many casualties. Whereas with a full-scale economic war against Russia, there's broad-based effects at home. And it's hard to quantify. I think it's difficult to draw a straight line between sanctions on Russia and oil prices and inflation. But there is a relationship. And that is why the Biden administration, even with the president, Joe Biden, who's the most hawkish American president on Russia we've had in the post-Cold War era, wasn't willing to do aggressive oil sanctions on Russia for domestic political reasons. And myself, I'm someone who comes at this from the side of. Economic statecraft. I've been very critical of the Biden administration for not being more aggressive on targeting Russian oil sales. But at the same time, like Kamala Harris lost the election probably in large part because of really high inflation. And so they were right, probably, that this was a big issue. I think it's hard to say whether or not things would have been different in the election had we not imposed sanctions on Russia. I'm a little skeptical of that. But so yeah, I think that this is a really important, an important reality that we need to take into account. So the question is, what do we do about it? And I think there are really two things that we need to do. The first is we need to realize that economic warfare is not just about offense, but also defense. We need to prepare ourselves proactively for foreign retaliation. The fact that, you know, Russia could cut off nuclear fuel shipments to the United States, and we still have our reactors that are relying on their nuclear fuel for a fifth of nuclear fuel. The Europeans, you know, could have prepared better for the gas cutoff that they suffered in 2022 from Russia, right? They had spent years sort of dragging their feet and not really transitioning away from Russian gas. I think we've started doing a little bit of this in the United States with public investments like the CHIPS Act, the Inflation Reduction Act. I think that a big underlying rationale for strategic investments in industrial policy is kind of defense against foreign economic warfare and also making ourselves more resilient from the blowback of our own tools against the Chinas and Russians of the world. So I think that that is a really important thing for us to do. I think the second thing beyond investing in our own defenses and our own resilience is that we have to be more honest with the American people. When I say we, American politicians, and in particular, the president needs to be more honest with the American people about the sacrifices that economic warfare requires. I think this was something that President Biden addressed when he said that, you know, we're taking steps to ensure that Russia sanctions don't raise prices at the pump. That's almost a direct quote that he said in early 2022. But I think that kind of rhetoric actually is not right because it just signals weakness to Russia. It signals, okay, well, you're not willing to go after the most important sector of my economy. How serious really are you? What I would prefer to hear is this may result in some level of increases of prices at the pump, but it's worth it for XYZ reason that matters for you, the American people. You don't hear that kind of rhetoric, but I think that's what's necessary. And I think President Trump will find that kind of rhetoric to be necessary if he truly does embark on a multi-front trade war with China, Canada, and Mexico, our three largest trading partners. If he goes down that path, he's going to need to be honest with the American people and say, look, this is going to lead to some economic pain at home, but it's worth it to stop fentanyl from coming across our borders. Whatever his argument is, we don't hear those types of arguments, but we need them more if the use of economic warfare is going to be sustainable politically and successful.

A related phenomena that I think is a really interesting and important aspect of sanctions policy in particular, although other economic statecraft tools as well, and that you talk about in the book in a couple of different places, I think has a bearing on this question we were just discussing is this question of de-risking and excess de-risking, the momentum you put into place when you start sanctioning and stigmatizing entities and how the private sector sometimes reacts beyond the strict legal limits and cutting actors off, something that was often seen as desirable in the counterterrorism context where who cares if a terrorism is even more isolated or terrorists even more isolated than we thought they were going to be by our regulations and laws. You mentioned the strategic role it played in the initial Iran sanctions program about saying this understanding that private sector actors are in a way going to respond beyond even the hard limits we can put is going to magnify the economic impacts. But more recently, we've really seen the U.S. government and allied governments and also international institutions like the UN wrestle with the downside of that excess de-risking bet. The most famous example is Afghanistan, where you've seen this real effort to say, yes, the Taliban is still sanctioned. It's going to stay sanctioned, but we're permitting and creating exceptions for all sorts of activity we want you to do because we want to resolve the economic crisis there. And those efforts faced all these challenges that no matter how much they lifted sanctions, actors wouldn't eventually come back somewhat remedied. Still kind of a persistent problem. Similar problems in Syria now. And then the Russia context, that right-sizing that you're describing that the Biden administration went into rightfully or wrongfully encounter problems as well, where when they start issuing licenses permitting sorts of conduct to limit the economic backlash against ourselves, against allies, you saw entities like Maersk famously, you know, cutting off shipments to Russia well in excess of what was actually required or even desirable from a U.S. policy perspective early on, requiring more specific engagement to kind of right-size that. How big a problem is that when you are dealing with a high-risk sort of engagement like true economic interstate warfare? And how do you calibrate to account for the double-edged sword of sanctions? The fact that if you start something in motion, the private sector may go even further with it than you want to in a way that will amplify negative effects.

This question that you raise about how the narrative we spread is perceived by others in the international community and the impact that has on compliance, both among companies and also among states, really gets into another aspect that's been a big focus of sanctions conversations for the last few years and played a major role in the last round of Russia sanctioned. That is the centrality of multilateralism. You know, obviously a major effort was made to put Europeans not only at the center, but in a lot of ways at the forefront of Russian sanctions, sometimes a little bit more for optics than for reality, but nonetheless, to make clear this was not only a multilateral, but a substantially European-driven effort to push back on Russia's invasion of Ukraine. We know the Treasury Department and its strategic review of sanctions policies issued, I think, two years ago now under the Biden administration, highlighted this point that multilateralism is really an important element of the sanctions tool. How much is that true for this particular application of sanctions and other economic statecraft tools for the state to state? competition element. Is multilateralism an essential component, at least for the United States or for all countries, or is there reasons why it might be overstated in centrality?

So I think the answer is that multilateralism is extremely important, but for not the reasons that people think it is. I think the mainstream view of this is that you need multilateralism to make sanctions effective in terms of their economic impact on a foreign government. So the argument would be, oh, well, if the U.S. says unilateral sanctions on Russia, then a European company will just backfill the work of a U.S. company. And the result will be that Russia is the same. The European company is better off and the American company is worse off. And so we're the only loser in that scenario. My own view is that perspective is a bit of a relic from this older era of economic warfare that came before the choke points from the 1990s, for instance. That was, by the way, what happened in the 90s. And it's what inspired the creation of secondary sanctions in the Iran-Libya Sanctions Act of 1996, when CONICO, the Houston-based oil company, left an oil project in Iran and then because of sanctions, and then Total, the French oil company, backfilled them within a few weeks. And that was like kind of in some ways the founding moment of secondary sanctions because you realized that this was a problem. Because of the choke points we discussed earlier and the use of things like secondary sanctions, the U.S. has the unilateral power to impose devastating economic harm, even without any international support. And the proof point of that is the Trump maximum pressure sanctions on Iran, where Trump tears up the JCPOA in 2018, reimposes the Obama-era sanctions without any international support. And in fact, with a direct international effort to undermine the sanctions, right? You have the British, French, and Germans create a platform to facilitate European trade with Iran and evade American sanctions, which is really remarkable. And I hope people remember that now. And it didn't matter. Iran's economy went into freefall again. And so I do think that America has tremendous power to impose unilateral economic pain on foreign countries, similar to our unilateral power in the military domain. The reason multilateralism, sorry, let me restart. The reason multilateralism is important is because economic pain is not an end in and of itself. It's a means to an end. And I think you need multilateral coalitions to achieve big diplomatic victories. So if you go back to the Obama administration, the Obama sanctions on Iran had a multilateral component, but the most important parts of them were unilateral. The oil sanctions that wound up locking up over $100 billion of Iran's oil revenues and overseas escrow accounts was a unilateral sanction imposed by Washington. And it worked. But I think as somebody who used to have to go around talking to banks in Asia and telling them that if they didn't comply with this sanction, we might sanction them. It was much easier to have those conversations by saying that we're doing this in compliance with UN Security Council Resolution 1929 and international law was on our side. And I think it made compliance much easier and also built support, frankly, for the nuclear negotiations, which were backed by the P5 plus 1, the full weight of the international community. The second reason that multilateralism is important, and this is a lesson I haven't really seen talked about many places, although I keep trying to put it out there. So hopefully it'll stick after this conversation, is that it's the only way that we can preserve our control over these choke points. If the U.S. is just doing unilateral sanctions run amok, you will see everyone hedge against the dollar, against key American technology companies, and start building alternatives. I think one of the most interesting contrasts that I sort of pulled out in my research is in 2018, Trump really not without thinking about it, just under pressure from Congress because Trump had done nothing on Russia's sanctions. They passed a law telling him to impose sanctions on Russian oligarchs. He hadn't done anything, sort of in, you know, randomly just impose the sanctions on Oleg Darpaska, who owns an aluminum company called Rusol. And Rusol basically is on the brink of collapse within a few days of this. And aluminum prices skyrocket. And Trump basically winds up ignominiously backing out of these sanctions without getting anything from it. The thing that people talk about less is that in the wake of that, the Russian central bank took all of its dollar holdings and moved them into Euros primarily, but also RMB and gold. You saw basically de-risking away from the dollar toward the Euro because the Euro was seen as a good enough substitute for the dollar without all the political risk of getting unilaterally sanctioned. By the US. Now, contrast that, Scott, with 2022, where, as I describe in the book, people like Janet Yellen are petrified that sanctions on the central bank of Russia are going to destroy the dollar's role as the world's reserve currency. The difference is Biden successfully gets all the other key issuers of reserve currencies, so the Euro, pound, and yen, to go along with these sanctions. And so it's not just the U.S. sanctioning the Central Bank of Russia, but the U.S. and its allies. And as a result, what have we seen since 2022? The use of the dollar in international finance has skyrocketed. It's gone up since the Central Bank of Russia sanctions. And it has taken away share, for instance, in international payments from the Euro. And I think it's because countries that had been sort of using the Euro for their trade or using the Euro for their reserve allocations and doing it potentially to hedge against the geopolitical risk of getting sanctioned by the U.S. started realizing, well, the Euro and the dollar have the same geopolitical risk, and there's way better investment opportunities with the dollar. And the dollar is way easier to use. So I think if we're going to preserve American economic power, we better do multilateral sanctions.

So that leads up to the other big issue that is always hanging over sanctions policy, which is this phenomenon of people leaving the dollar, the de-dollarization fear that Janet Yellen was concerned about, that it's still an ever-present concern. You know, in the book, I think you point out what I think reflects the conventional wisdom, which is that there's not much evidence we are near a turning point yet in terms of the dollar losing its dominant role. Little other competitors are chipping around the edges, popping out, but none of them really have a grasp or becoming a really, really big market share. So what does that tell us about how that risk should be priced into how do we approach a lot of these policies? It's one of these things where the costs are so substantial and potentially irrecoverable when it happens that I think it really does psychologically weigh extremely heavily on policymakers and observers alike. Because the idea is that once you drive all these other actors to an alternative remedy, you know, once you make the choke point too tight and the water just begins to flow around it, it's hard to guide them back through that initial channel. But what are the indicators? How do we know when we're getting too close to that? How do we calibrate to avoid becoming that last straw that breaks the camel's back?