On the evening of Friday, October 9, the Treasury published General License 135. It authorizes the “sale, delivery, offloading and importation” of Russian diesel until April 7, 2027, and does not specify a buyer, a seller, or a quantity. The President provided the quantities after a call with President Putin: more than 300,000 tons “immediately,” 500,000 in November, and millions more if Russia’s refineries allow. The first shipment amounts to less than a day of American consumption. The shipment comes from a country that barred its own diesel exports in July and, in the last quarter, imported the fuel for the first time. AAA put the national average for diesel that day at $6.28 a gallon.
The license is valid for six months. The law beside it allows nine days. On September 18, the President signed a sanctions act that the Senate had passed 86-11. By October 18, it requires duties of up to 500 percent on Russian goods and duties of up to 100 percent on every export to the United States from any of the five largest importers of Russian crude oil or natural gas that knowingly purchases again. The first duty covers petroleum products, and so the diesel the Treasury has just licensed. A third law, passed in 2022 and never repealed, still bars Russian petroleum from American ports; the license does not mention it. Washington must penalize Russia’s customers nine days after licensing itself to become one.
For six weeks in these pages, I have argued that the United States is assembling the instruments of great-power competition without deciding who commands them. This week, the pattern reached the oldest instrument of economic warfare, the sanction, and it was not only an American pattern.
On October 7, the European Union’s ambassadors agreed on their 22nd package of sanctions against Russia. They removed one Russian company at Estonia’s request because it supplies the rare earths that an Estonian plant refines for European magnets. Two days later, in Beijing, the European trade commissioner announced an understanding under which China will moderate its exports of hybrid cars to Europe. In return, Beijing will continue to process European companies’ rare-earth and magnet licenses through what both sides call a green channel. The notice suspending China’s licensing rules for American buyers still expires on paper on November 10, eight days before the President is due in Shenzhen. The United States received no such channel.
China’s rare-earth controls are administered by a single ministry, which this week rewarded Europe while leaving the United States waiting. That is an exception used as an instrument: a favor granted in exchange for a concession, and revocable. The American and European exceptions were of another kind. They were relief from sanctions the governments had imposed themselves, granted because the price of diesel or a factory’s feedstock had become intolerable. An exception of that kind is information. It tells Moscow and Beijing the price at which the pressure on them will be lifted.
Each of the week’s decisions had a reason its government could defend. Diesel at more than six dollars a gallon before winter is a real problem, and so is a processing plant in a frontline state of the North Atlantic Treaty Organization. But a sanction lasts only as long as its author can go without what it forbids.
The difficulty is that each decision was made by the office responsible for a single problem. The Treasury issues the license; the President sets the duties, and the Trade Representative adjusts them afterward. The fuel Russia has promised comes from refineries Ukraine is striking, so every Ukrainian strike now reduces the diesel Washington has announced, and Moscow has a commercial reason to ask the United States to restrain Kyiv. The President had already asked Kyiv in September to “take it easy on the refineries,” and President Zelensky called the license “a weak decision by strong partners.” No single authority beneath the President is charged with weighing one of these decisions against another before it reaches him. Each office did its work, and the claim that prevailed was the one with the nearest deadline.
The United States has faced this problem before. In July 1943, after a public quarrel between the board planning economic warfare and the agency financing it, President Roosevelt abolished the board. By September, he had placed economic warfare, lend-lease, and foreign relief under a single Foreign Economic Administration. He did so in the middle of a war because instruments that pull against one another need someone with the authority to rank them.
The duties due on October 18 are the place to begin, and they will be easy to read. A real duty on Russian goods and on Russia’s customers restores the sanction, and taxes the diesel Washington asked for. A nominal rate satisfies the statute and confirms the license as the policy. A waiver says so outright. In the last two cases, Russia’s customers may conclude that buying is safe, and Beijing that American pressure has a price that can be quoted in advance.
Avoiding that takes two things the West has not arranged. The first is a single authority who can rank the claims before they reach the President and hold every office to that ranking: someone who decides whether the sanction yields to the price of diesel or the price of diesel yields to the sanction. The second is provision. A sanction is a siege, and a siege is won by the side that can wait. A government that means to forbid a thing should first establish what it will need from the adversary while the prohibition lasts, then stockpile it, find it elsewhere, or grant the exception at the outset on its own terms.
If you advise on these decisions, ask for the ranking before the duties are signed and for the provisions before the next sanction is drafted. Otherwise, Moscow and Beijing will read October 18 as a schedule of American needs, with the dates on which they fall due.
Richard Berry is the founder and principal of Stratnova Advisors and a former Senior Executive who led the Commander’s Action Group at U.S. Indo-Pacific Command; he publishes the weekly assessment Strategic Horizons.
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