US Treasury Secretary Jacob Lew warned Wednesday that the excessive use of economic sanctions could weaken the role of the United States and the dollar on global markets.
“Sanctions should not be used lightly,” Lew said in a speech in Washington.
“We must be conscious of the risk that overuse of sanctions could undermine our leadership position within the global economy, and the effectiveness of our sanctions themselves,” he told The Carnegie Endowment for International Peace, according to his prepared remarks.
The Treasury secretary pointed to US vulnerability in the evolving global economy if sanctions are overused.
“The risk that sanctions overreach will ultimately drive business activity from the US financial system could become more acute if alternatives to the United States as a center of financial activity, and to the US dollar as the world’s preeminent reserve currency, assume a larger role in the global financial system,” he said.
“Our central role must not be taken for granted,” he warned.
“If foreign jurisdictions and companies feel that we will deploy sanctions without sufficient justification or for inappropriate reasons — secondary sanctions in particular — we should not be surprised if they look for ways to avoid doing business in the United States or in US dollars.”
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