This op-ed by Aynne Kokas and Oriana Skylar Mastro was originally published in the Australian Financial Review.

The images of bare-chested, flag-waving MAGA loyalists overtaking the US Capitol flooded US social media and news channels in the days following the January 6 siege against the electoral college count. Memed and amplified, the same images circulated widely on Chinese social media and state-owned news sites without even the need for critical commentary.

The literal destruction of the US Capitol at the hands of President Donald Trump's followers required little imagination to characterize abroad as the downfall of American democracy.

There are many reasons for pessimism. According to one of the most authoritative indexes, Polity, the United States is no longer the world’s oldest continuous democracy, dropping in status to a system that is part democracy, part dictatorship.

Beyond the domestic concerns faced in the aftermath of the breach of one of America's most hallowed buildings, the Capitol siege was a win for China. US soft power, one of its comparative advantages in the great power competition, has taken a huge hit.

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Soft power is “the ability to get what you want through persuasion or attraction in the forms of culture, values, and policies”.⁠ The US has been the primary beneficiary of soft power, with its globally recognized brands, pop culture, fast-food chains, world-renowned universities, and political values.

It is relatively low cost and high impact compared with other forms of power. The United States' relative attractiveness is one of the reasons America prevailed in the Cold War.

The Chinese government is having a propaganda field day. More than ever, the US looks like a country in decline, discouraging to allies and potential partners. Chinese commentators have noted that America's days as the "city on the hill" have come to an end. This is karma, some say, payback for the US supporting opposition groups, as in Hong Kong. As one netizen commented on the popular microblog website Weibo: "So lucky to be born in China."

China has also been trying to increase its soft power through traditional mechanisms such as building its media, education, and tourism sectors. It has enjoyed only moderate success in these areas because of its censorship, pollution, and lack of independent civil society.

But COVID-19 has led to the strengthening of other Chinese public diplomacy efforts, such as its landmark Belt and Road Initiative global trade and investment scheme.

Related initiatives such as the Digital Silk Road, a program to build out global digital infrastructure using Chinese technology, and the Health Silk Road, a plan to export Chinese health expertise through things such as COVID-19 laboratories and vaccine diplomacy, draw on China's comparative advantage in a top-down soft power approach.

Meanwhile, the Trump administration has undermined the historical sources of US soft power. It has shuttered visa lines, investigated international students on campus, and driven the rise of a culture of nationalism. The cancellation of the Fulbright US Student Program and the Peace Corps program in China are prime examples. And the COVID-19 decreased US media production, educational exchange and tourism, which shrank opportunities for promoting its democratic values on the global stage.

A bird’s-eye view of America's relative soft power may seem to offer cause for optimism. Even after four years of Trump's buffoonery and "America First", the US is still far ahead of China, ranking fifth in overall soft power, while China ranks 24th. And isn’t this what matters in competition?

Yes and no. The problem is two-fold. First, the US relies more on its political values as a soft power source than Beijing does. Ironically, this has especially been the case during the Trump administration. National Security Adviser Robert O’Brien has argued that democracies and authoritarian countries such as China “are offering a different approach to the world”. Secretary of State Mike Pompeo has argued to international audiences that democracy is “what we’ve got right”.

Second, Beijing has tried to leverage its comparative advantages to build soft power through pathways other than political values, especially where a top-down government approach is effective. China set up COVID-19 testing labs in Palestine in agreement with Israeli and Palestinian authorities. It extended its hand in Africa by building more than 70 percent of its 4G infrastructure.

Depending on need, useful solutions can be as compelling as political principles.The future of the US as a world leader is at stake. American military base access worldwide depends on perceived political alignment between the US and its allies. In the tech sector, the widespread adoption of US platforms relies on other countries finding that benefits to allowing in foreign platforms outweigh the potential political risks.

Successful multilateral treaty negotiations on issues such as global trade and climate change rely on the perception of a dependable US political system.

Sanctions will remain part of the US toolkit for dealing with Russia under the incoming Biden administration. Certain principles should guide their use and could increase the chances that they will achieve US policy goals: sanctions should be embedded in an overall Russia policy, linked to a specific policy goal, understood by the Kremlin, clearly reversible if Russia ceases the offending action, and coordinated with US allies.

As Joe Biden prepares to become the 46^th president of the United States, speculation has begun on what a Biden administration will mean for US policy toward Russia and sanctions on Russia. Sanctions will remain part of the US toolkit for responding to egregious Russian misbehavior. It would be useful if the new administration set down principles early on for their application.

As relations between Washington and Moscow—and, more broadly, between the West and Russia—deteriorated over the past decade, the United States and Europe applied an increasing number of sanctions in response to Russian actions. The United States has now sanctioned Russia for its aggression against Ukraine, cyber and disinformation activities aimed at affecting US domestic politics, and support for Syria and Venezuela, among other things. The United States has long applied sanctions on the Soviet Union and Russia due to human rights concerns.  The 1974 Jackson-Vanik amendment denied permanent normal trade relations status to the Soviet Union until Moscow allowed religious minorities to emigrate. The 2012 Magnitsky Act sanctioned Russian officials involved in serious human rights violations such as torture or extrajudicial killings (it was later amended to apply to other countries as well).

The sanctions result from both executive orders and legislation. Some target individuals with visa denials and asset freezes. Other sanctions hit specific companies. Still others aim at key elements of the Russian economy, particularly the financial, energy, and high-tech sectors.

The sanctions have had an impact on Russia’s economic growth, though the exact amount is difficult to measure and a subject of debate. Some sanctions may not be felt for some time. For example, sanctions that deny Russian companies access to American technology and financing for developing new and technically challenging oil fields do not constrain Russian oil production now. They will, however, limit Russia’s ability to develop new oil fields requiring high-tech extraction techniques as current wells are depleted.

The Kremlin regularly pooh-poohs sanctions, but Russian officials miss no opportunity to call for their lifting. Lifting sanctions was a key point during Vladimir Putin’s intervention in the virtual G-20 summit in November. True, in most cases, sanctions have not achieved their desired goal. Russia has not, for example, ended its conflict against Ukraine in Donbas. Sanctions, however, may well have deterred the Kremlin from other steps. Russian and Russian proxy forces have not tried to seize Mariupol, as many feared they might in 2015, and Putin dropped the claims to vast amounts of Ukrainian territory he made in  2014 (so-called “Novorossiya”).

When the Biden administration takes office, sanctions will undoubtedly remain an element of US policy toward Russia. To enhance its effectiveness, the administration should base its sanctions policy on certain principles.

First, the Biden administration should embed sanctions in a broader US policy toward Russia.  If the Trump administration had an overall Russia policy, it never articulated it. Absent a broader framework, sanctions seemed to take on a life of their own.

An overall policy should include strong measures to deter and push back against Russian misbehavior. These measures include enhancing the NATO military posture in the Baltic region, support—including lethal military assistance—for Ukraine, and sanctions. The overall policy should also include dialogue, both to apply guardrails, such as arms control, on what has become an increasingly adversarial relationship and to professionalize discussion of hard issues that might (or might not) chip away at some problems over time. The Reagan administration successfully used this combination in the 1980s.

Second, sanctions are not an end in themselves and should not be treated as such. They offer a means to achieve a policy goal and, thus, should be clearly linked to that goal, as in “this sanction will apply until Moscow does X” or “if Moscow does X, Washington will respond with this sanction.” The aim of sanctions should be to affect Kremlin calculations of the benefits and costs of its actions, hopefully tipping the balance against those actions that threaten key Western interests.

The Kremlin should also have clarity on what it must do to get the sanctions lifted. Thus, the sanctions should be tied to a single policy goal. Sanctions that seek to get Russia to correct two different kinds of misbehavior—for example, a ban on the export of dual-use technologies stemming from Russia’s aggression against Ukraine and the attempted poisoning of Sergey Skripal in Britain—likely will achieve neither objective.

Third, sanctions should seek to deter, if possible. It is easier to deter and dissuade an adversary from taking an unwanted action than  compel the adversary to reverse an action it has already taken. Specifying the sanction(s) that would result from a particular Russian action in advance could have a greater chance of affecting the Kremlin’s cost-benefit calculation.

Fourth, for sanctions to be effective in achieving their policy goal, Moscow has to believe that, if it takes the action desired by Washington, the sanction will be lifted. Unfortunately, US sanctions do not have the best history in this regard. The 1974 Jackson-Vanik amendment applied to the successor states, including Russia, following the Soviet Union’s 1991 collapse. Russia permitted open emigration, leading the Clinton administration in 1994 to determine that Russia had fully complied with Jackson-Vanik. Yet it was not until 2012 that Congress removed Russia from the amendment’s purview and granted the country permanent normal trade relations status—and then only in the Magnitsky Act, which applied new sanctions. If the Kremlin concludes that the sanction will remain in place regardless of what it does, it will have no      incentive to change its behavior.

Fifth, coordination with allies, particularly the European Union (EU), can dramatically enhance the impact of sanctions. Multilateral sanctions send a stronger political message. They also generate a greater economic impact. When the United States and European Union began consulting on sanctions against Russia after its seizure of Crimea, EU trade with Russia dwarfed US-Russia trade. Europe, thus, had more to withhold.

Currently, the fate of the Nordstream 2 gas pipeline could complicate sanctions coordination with Europe. The US government has good reasons to oppose Nordstream 2, which is hardly a commercial project. Renovating the Ukrainian pipelines would have been vastly cheaper, but Russia wants to circumvent Ukraine for geopolitical reasons. Nordstream 2, however, could pose a major problem between the Biden administration and Germany, the pipeline’s main European backer. Finding a solution to this issue will strengthen Washington’s ability to maintain a united sanctions front with Europe against Russia.

Sixth, the US government might consider pairing a carrot with sanctions to affect Kremlin thinking. For instance, to break the deadlock on a Donbas settlement, Washington could work with Berlin and Paris on a plan for a UN-mandated peacekeeping force and interim international administration. The peacekeeping force and interim administration would deploy to Donbas, providing a transition between the departure of Russian and Russian proxy forces and full restoration of Ukrainian sovereignty. When offering this as a face-saving way to help Russia leave Donbas, Washington and its partners could quietly add that failure to take up the offer would trigger additional sanctions.

Seventh, the Biden administration should consult with Congress as it shapes its sanctions policy. This coordination should prove easier than it has during the past four years, when both Democrats and Republicans on Capitol Hill did not trust the White House’s management of sanctions. That mistrust led to an overwhelming vote for the 2017 Countering America’s Adversaries through Sanctions Act, which gave Congress power to block the lifting of sanctions. The Biden administration will want to ensure that, if Moscow moves to correct offending misbehavior that justifies lifting sanctions, Congress does not block their lift. If the Kremlin adjusts its policy on a particular question and the linked sanction remains in force, that will undercut the power of all other and any future sanctions. Sanctions, in that case, would become just a means of punishment, not of attaining a policy objective.

Within these principles on sanctions, there is room for creative thinking. For example, would it make sense, when targeting individuals for visa sanctions and asset freezes, to sanction their families as well? It is one thing if a Russian businessman cannot travel to the United States or Europe; it would be quite another if his spouse could not make her annual shopping trip to London and his kids could not attend school in the United States or Britain.

Principles such as the above offer a structure for managing sanctions policy toward Russia. They also could increase the chances that sanctions succeed in achieving their desired policy outcomes.

. . .

Steven Pifer is a William Perry Research Fellow at Stanford’s Center for International Security and Cooperation. A retired Foreign Service officer, his 25+ years with the State Department included assignments as Deputy Assistant Secretary responsible for Russia and Ukraine, Ambassador to Ukraine, and Special Assistant to the President and Senior Director for Russia, Ukraine and Eurasia on the National Security Council.

Originally for Georgetown Journal of International Affairs

This op-ed by Oriana Skylar Mastro and Zack Cooper originally appeared in Australian Financial Review.

Australia’s trials are not the first time Beijing has used economic coercion against another country.

It has become so common that we are becoming desensitised to it. Some notable examples include Beijing’s limitations on rare earth exports to Japan in 2010, Norwegian fish exports in 2010, Philippine tropic fruit exports in 2012, Vietnam’s tourist industry in 2014, Mongolian commodities trade in 2016, and South Korean businesses in 2017. In each case, Beijing sought to achieve a political objective by imposing economic penalties.

This case is different. Beijing has typically been ambiguous about the purpose or nature of its coercive economic statecraft. Despite evidence otherwise, it blamed the Japanese ban on meeting a yearly quota, the Philippine ban on pesticide exposure, the tourism drop to Vietnam on changing Chinese preferences, and the closure of South Korean stores on fire code violations. In Australia’s case, though, Beijing is doing away with these pretenses.

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China has not been shy this time about connecting its punitive actions to its unhappiness with Australian policies. The Chinese foreign ministry has listed a “series of wrong moves” by Australia for the disruption in relations. Beijing’s embassy in Canberra then gave a list of 14 “mistakes” to the Australian press.

These grievances include Australia’s foreign interference legislation, foreign investment reviews, funding for Australian think tanks, and unfriendly media reporting. Some of these criticisms are particularly ironic coming from Beijing, which often objects to foreign interference in other countries’ domestic affairs.

A core component of China’s strategy is a disinformation and propaganda effort designed to paint its moves as merely defensive, a proportionate and legitimate response to actions taken by the other side.

Australia has done nothing ‘wrong’

Let’s be clear: Australia has done nothing “wrong” in promoting and protecting its democratic institutions at home. It should not censor its media, obstruct analysis by outside experts, or shy away from safeguarding its democratic processes.

This time, the current trade restrictions are about more than making an example of Australia or showing smaller powers that they’ll pay if they have something to say about how the Chinese Communist Party governs at home. Beijing’s aims have taken on new proportions. Party leaders are now willing to punish democracies simply for upholding basic democratic principles within their own countries.

The message is clear: curtail some of your democratic principles or pay the price.

The US needs to work with like-minded states around the world to address this new threat. Free countries need to speak out together in Australia’s defence. If democracies do not hang together, they will hang separately. We should articulate that China’s actions are more than a violation of international law; they threaten the health of our democracies at home. Such a reframing would show Beijing that economic coercion will no longer be treated as a low-stakes tactic.

But words are not enough. We need coordinated action. US alliances are designed primarily to deter and defend against military attacks. Chinese actions make clear, however, that there are alternative methods for undermining peace, prosperity and freedom that our alliances do not adequately address. New alliance consultations to protect against economic attack would enhance our deterrence against China.

Washington should also launch a series of discussions with its allies to determine what new institutional mechanisms, commitments, and structures are needed to defend against economic attacks, not just military ones.

We should ensure the ability to take joint reciprocal action against Beijing in the economic realm, particularly to defend smaller countries. China engages in economic coercion because it is effective and relatively risk-free. But if instead like-minded countries responded together when one was attacked economically, this would go a long way in discouraging Beijing from employing such tactics.

Using all the tools of power

A critical first step is mapping dependencies on China and investigating how to limit over-dependence that open democracies to unacceptable economic vulnerability. As in the military realm, we need to enhance our resiliency against attack by avoiding over-dependence on any single import, export, or supply chain decency. This is a task that the so-called D10 (G7 plus Australia, India, and South Korea) should take up early next year.

The good news is a collective response to Chinese economic coercion will be more feasible under a Biden administration. President-elect Joe Biden and his senior advisers have articulated a preference for multilateral responses to Chinese aggression.

And while President Donald Trump relied mainly on military moves to warn and punish Beijing, Biden’s team prefers to make use of all tools of power. For these reasons, there has even been talk of rejuvenating past efforts like TPP. US allies and partners are also likely to see Biden as more reliable, making them more willing to undertake the risky venture of joining forces against Beijing.

The United States, Australia, and other allies and partners tried to welcome China into the international community. This was the right move. It has been good economically for many advanced economies, including Australia and the United States. But there is a flip side to every coin.

Australia has become too vulnerable to the whims of Beijing. And the US has few options to protect against such economic pressure. The incoming Biden administration needs to fundamentally rethink the nature of alliances so that countries like Australia have a third option the next time Beijing forces a choice between freedom and prosperity.