Posted  Originally on Aug 19, 2026 by Martin Armstrong |  

Europe apparently believes it can sanction the entire world into submission. Eight countries outside the European Union have now agreed to align themselves with Brussels’ latest sanctions against Belarus: Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Montenegro, North Macedonia, Norway, and Ukraine. The measures further restrict trade and technology that Brussels claims could contribute to Belarusian military and industrial capabilities. This is being presented as another great demonstration of European unity. What they never discuss is what happens when Europe progressively eliminates its own ability to conduct business with everyone it politically dislikes.

The Europeans have completely lost sight of what made Europe prosperous. It was commerce. Europe traded with everyone. Germany bought energy from Russia and sold machinery to China. Britain became a global financial center because capital from around the world flowed through London. European manufacturers sold automobiles, chemicals, machinery, and luxury goods from Moscow to Beijing and throughout the Middle East. Commerce created interdependence, and interdependence provided at least some restraint against conflict.

Now Brussels has decided that foreign policy consists of creating another sanctions list every few months. Belarus is merely the latest extension of a policy that has become institutionalized. The EU says its sanctions against Minsk are justified by domestic repression, support for Russia in Ukraine and what Brussels describes as hybrid attacks against the European Union. The sanctions now extend across finance, technology, trade, transport, military-related goods and industrial capacity. The latest measures deliberately expand restrictions on products that could strengthen Belarusian industry, not merely weapons themselves.

Once sanctions expand from targeting individuals responsible for a specific policy into deliberately weakening another country’s industrial capacity, you have moved from diplomacy into economic warfare. Politicians then act shocked when the targeted country responds by building deeper economic and military relationships with nations outside the West.

Russia was supposed to collapse under sanctions. Instead, Europe severed its own access to cheap Russian energy, Russia redirected trade toward Asia, China gained enormous leverage as a buyer, India increased its role in global energy markets, and European industry was left paying higher input costs. Now Brussels is preparing yet another massive sanctions package against Russia. Kaja Kallas says the next measures will be the most far-reaching since the war began, potentially adding around 1,600 Russian individuals and entities to a sanctions system that already covers thousands.

How many sanctions packages does it take before someone in Brussels admits that sanctions are not a substitute for diplomacy?

The EU already adopted its 21st sanctions package against Russia in July, targeting another 218 individuals and entities, including 94 Russian banks as well as the Moscow Stock Exchange, crypto operators, oil infrastructure and additional components of Russia’s so-called shadow fleet. More than 100 Russian banks have now been sanctioned, with dozens disconnected from SWIFT. Yet Russia still exists and the war continues.

This obsession is becoming economically self-destructive because the West increasingly treats neutrality as unacceptable. It is no longer sufficient for Europe to sanction another country itself. Brussels wants candidate countries, neighboring states, corporations, banks, shipping companies and governments throughout the world to enforce European foreign policy as well. The European Council has openly called on other countries to align themselves with EU sanctions, particularly candidate countries.

Albania, Montenegro, North Macedonia and Bosnia and Herzegovina all have European integration ambitions. Brussels is exporting its foreign policy before some of these nations have even entered the Union.

Europe is steadily dividing the world into countries it approves of and countries with which commerce becomes politically suspect. Russia is sanctioned. Belarus is sanctioned. Iran is sanctioned. Various Chinese companies have been targeted under Russia-related restrictions. Trade with other countries is increasingly scrutinized for sanctions circumvention. Brussels has transformed international commerce into a political loyalty test.

China understands what Brussels does not. Trade creates influence. Infrastructure creates influence. Investment creates influence. That is why China has spent decades building commercial relationships throughout Asia, Africa, Latin America and the Middle East. The Europeans arrive with regulations, lectures and sanctions while China arrives asking what you want to buy and what you want to sell.

Sanctions weaponize the financial system. Every time Western governments freeze assets, block banks or prohibit transactions, another government somewhere in the world asks whether its own reserves and commercial relationships could eventually be subjected to the same treatment. You do not need China to replace the dollar or euro tomorrow for this process to matter. You merely need governments and corporations gradually building alternatives because they no longer regard Western financial infrastructure as politically neutral.

The same thing happened with Russian energy. Europe believed it could dictate where Russian commodities could be sold because Brussels still thinks Europe controls world commerce as it did during the colonial era. Those days are gone. Asia represents an enormous share of global economic growth. China and India are major commodity consumers. The Middle East has become an increasingly important financial center. Nations throughout the Global South are no longer prepared to structure their entire foreign policy around what Brussels or Washington demands.

Germany is already discovering what happens when geopolitics replaces economics. Its industrial model depended on inexpensive energy and enormous foreign markets. Russian energy was sacrificed to sanctions while China has increasingly become a competitor rather than simply a customer. Brussels then piles Net Zero regulations, taxes and bureaucracy on top and wonders why factories close or investment moves elsewhere.

The eight countries joining the Belarus sanctions may appear insignificant in isolation. They are not. They represent the expansion of a geopolitical system in which Brussels increasingly expects countries surrounding the EU to adopt its enemies as their own.

The more the West weaponizes trade, banking, currencies, technology and energy, the greater the incentive becomes for everyone outside the West to build systems that Washington and Brussels cannot control. Europe is therefore helping create the very multipolar world its political establishment fears while simultaneously weakening its own industrial competitiveness in the process.

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