Sanctions are a cat-and-mouse game. They always have been. As soon as restrictions are imposed, evasion networks adapt, financial corridors shift, and opportunistic jurisdictions, whether in Central Asia or the Gulf, offer their services to absorb the fallout. This is not a flaw in sanctions logic. It is the terrain.
The mistake the West keeps making is treating sanctions as a fixed-line defense while adversaries treat them like an obstacle course to be circumvented. China understands this dynamic. It has studied how Russia adapted to sanctions in the wake of its invasion of Ukraine. It has mapped how loopholes are exploited. It has paid close attention to how long it takes the United States and its partners to convert intent into executable policy. Sanctions as deterrence only work if they are pre-designed, institutionally reinforced, and strategically credible. Right now, they are none of those things. But they could be. And the window to build that capability is closing.
In the context of China and Taiwan, sanctions must function not as punishment but as prevention. That only happens when adversaries believe the system behind them is real, cohesive, and durable. At present, the only thing being deterred is Western action itself.
The United States public has no appetite for foreign intervention. That reality shapes every policy conversation that follows. If war is to be avoided, it will not be because of military signaling or ambiguous treaty frameworks. It will be because the economic consequences of aggression have been made unavoidable, clear, and fully actionable. The strategic deterrent must be economic, not symbolic.
We know what happens when sanctions are applied late. The West’s response to Russia’s invasion of Ukraine was scattered, slow, and weighed down by its own disagreements. Meanwhile, Russia had already built a detour. Trade kept flowing through Kyrgyzstan, Kazakhstan, Armenia, and the UAE, almost without pause. China picked up the rest. Financial pathways moved through crypto exchanges, shell banks, and trade finance mechanisms structured specifically to evade Western oversight.
Europe’s energy dependence further diluted the impact. The U.S. Treasury acted quickly, but its European counterparts were constrained by domestic political costs. There was no shared enforcement backbone, no coordinated communication strategy, and no sense of continuity once the headlines moved on. The result was a sanctions regime that damaged Russia’s economy over time but did nothing to stop the war itself.
Even so, that flawed response still yielded measurable returns. Billions in defense revenue were disrupted. Russia’s central bank reserves were frozen. High-tech imports ground to a halt. What was accomplished, imperfectly and belatedly, showed the power of sanctions even when poorly executed. That makes the failure to prepare a China strategy even more damning.
China has spent years watching this unfold. It has drawn its own conclusions. It is planning accordingly. Beijing is building redundancy into every system that would be affected by Western sanctions. It is diversifying its supply chains. It is pushing de-dollarization in regional trade. It is embedding yuan-clearing hubs into allied banking networks and prepositioning critical resources through state-owned firms and long-term contracts. It is not simply preparing to survive sanctions. It is preparing to outlast them.
That effort is not limited to the mechanics of finance. It extends to political conditioning, domestic messaging, and psychological resilience. Chinese citizens are being fed a narrative of foreign containment, unjust aggression, and the inevitability of economic confrontation. When sanctions come, Beijing will claim it expected them all along. And it will be right.
The West, by contrast, is nowhere near ready. The agencies responsible for sanctions enforcement remain thinly staffed and structurally disjointed. The Office of Foreign Assets Control at the U.S. Treasury Department is operating on a technology budget that is woefully insufficient. And as of now, hiring within the Office of Terrorism and Financial Intelligence is frozen until at least October 2025. The EU does not have a unified enforcement directorate at all. Member states act independently. Compliance obligations vary across borders. The result is a bureaucratic lag that any competent adversary can exploit.
There is no reason this has to remain the case. The United States has the technical capability, the regulatory reach, and the global influence to lead a credible sanctions regime. What it lacks is operational infrastructure and political urgency. There should already be a standing interagency structure for sanctions coordination. It should include Treasury, Commerce, State, the intelligence community, and allied liaisons. It should model different escalation scenarios. It should draft pre-approved lists of targeted entities. It should work with the private sector to align enforcement triggers.
The problem is not only one of design. It is also one of communication. The public is being led to believe that sanctions are not inherently painful. Sanctions on China will hurt. They will disrupt global markets. They will make certain goods more expensive. Consumers and businesses will feel it, and not just at the margins. If leaders wait to explain that until after the fact, they’ll lose the room. The public won’t rally around pain it didn’t see coming.
This is where deterrence will live or die. If the West cannot absorb its own pressure, it will never be able to apply pressure to others. The public must be told, in no uncertain terms, that sanctions are part of the price of avoiding war. Governments must be willing to defend that position even when the opposition is loud, organized, and well-funded.
The private sector must also be treated as a strategic partner. You cannot drop sanctions into the private sector and hope it figures them out. Banks, freight companies, chipmakers, and insurers need direct lines of communication, not legalese or last-minute guidance. They should already know what’s coming, what’s expected of them, and when it’s going to happen. Anything less is a setup for failure. Otherwise, compliance will be inconsistent. Enforcement will collapse under its own contradictions.
Europe, in particular, is not ready. A full-scale cutoff from China wouldn’t just dent trade volumes, it would rupture supply lines the continent has quietly come to depend on. An overwhelming majority of the EU’s rare earths come from China. So do 98 percent of its solar panels. Magnesium and graphite? Nearly total dependence. Those aren’t optional materials. They’re embedded in everything from missile guidance systems to electric motors to next-gen grid storage. Shut them off and you don’t just delay production, you strand it. Pharmaceuticals are no better. More than 80 percent of the active ingredient in Europe’s antibiotics are sourced either directly from China or through Asian firms that rely on Chinese precursors. These are structural choke points, not hypotheticals. Beijing doesn’t need to guess where Europe is vulnerable. It already knows. And if Europe wants to retain the option of acting decisively, it cannot wait until after the leverage has been used. The time to build buffers, lock in alternative supply, and restore domestic production is now, not in the fog of retaliation.
All of this must occur before a conflict begins. Once a missile is fired, it is too late to build the architecture of deterrence. Beijing is betting on exactly that delay. It expects the West to respond slowly. It expects internal debate. It expects symbolic designations, not operational disruption. It expects lawyers to haggle over exemptions. It expects bureaucrats to hesitate. It expects politicians to retreat once prices spike. The only way to counter that assumption is to make clear, now, that it is false.
Sanctions must be executable in hours, not weeks. They must be coordinated, not improvised. They must be explained to the public before, not after, the pain begins. The policies must exist on paper. The command chains must be practiced. The legal triggers must be in place. This is the price of credibility.
China has already begun the hardening process. It is building out Belt and Road infrastructure not just for trade, but for sanctions insulation. It is quietly transitioning from Western payment rails to regional alternatives. It is offering developing nations infrastructure financing in return for diplomatic insulation. It is embedding long-term supply chain control in places that will never make headlines but will matter enormously in a future sanctions campaign.
This is not a defensive crouch. It is offensive deterrence in reverse. China is creating the conditions under which it believes it can weather economic confrontation without folding. That calculation is not irrational. It is based on what it has already seen: slow coordination, limited enforcement, and politically fragile Western resolve.
If we do not prepare for the hard edge of sanctions deployment, we are signaling not strength, but softness. There must be a recognition that any sanctions regime against China will come with Chinese retaliation. Markets will be disrupted. Exporters will be targeted. Multinationals will face pressure on both sides. The question is not whether these things will happen. The question is whether Western governments are willing to pay that price to avoid something worse.
The diplomatic piece must also scale up. Countries that serve as likely evasion nodes must be briefed and incentivized well in advance. Kyrgyzstan, Kazakhstan, the UAE, and others should know exactly what circumvention looks like, what enforcement will follow, and what support they will receive if they choose to cooperate. Absent that outreach, they will do what they did for Russia. They will facilitate trade, route around controls, and wait for enforcement to weaken. But if those countries are engaged early, tied into incentives, and given a role in enforcement, they may instead act as bulwarks.
Regional allies must be fully onboard. Japan, South Korea, India, Australia, and Taiwan should be embedded in this planning. That includes joint enforcement timelines, shared intelligence, coordinated export controls, and contingency access to strategic reserves. If sanctions only flow from Washington and Brussels, China will simply reroute. Deterrence only works if there is no way around it.
The tools exist. The intelligence exists. What is missing is the political will to act before action becomes reactive. Sanctions must be treated as an extension of national defense, not a tool of diplomatic escalation. Their value is in preemption, not punishment.
Sanctions are not a statement. They are a system. Systems must be designed, staffed, and stress-tested. The opportunity to do that is right now. It will not exist once conflict begins.
If the West continues to treat sanctions as a backup option, they will function exactly that way, too late to matter, too weak to stop what has already started. Conflict is only preventable if we act before it begins. Beijing has already done so. The West must now do the same.
This will not be easy. It will not be popular. But it is necessary. The question is no longer whether sanctions can work. The question is whether we are willing to build them in time.
Beijing is betting we are not. It is time to prove them wrong.