How the new US administration responds will be an early test of Biden’s dual pledges to re-center human rights in US foreign policy and work more closely with allies.
Biden on Monday pledged to “stand up for democracy” and threatened to re-impose sanctions gradually rolled back by former President Barack Obama after Myanmar's generals initiated democratic reforms and released many political prisoners a decade ago.
“The reversal of that progress will necessitate an immediate review of our sanction laws and authorities, followed by appropriate action,” Biden said in a statement.
The Trump administration hit four military commanders, including the top general Min Aung Hlaing, with such sanctions after a brutal 2017 purge that drove more than 700,000 members of the Rohingya minority from their homes and into neighboring Bangladesh.
Biden could establish a fresh sanctions program against Myanmar with an executive order that would declare a national emergency regarding developments in the country, said Peter Kucik, a former senior sanctions adviser at the US Treasury.
Doing so would enable the administration to spell out “how they view the coup and what they want to see” and exert pressure accordingly, he said, adding that Biden has broad authority to issue such an executive order under the International Emergency Economic Powers Act (IEEPA).
That approach would be opposed by some businesses who want to keep economic ties with the country open, according to an advocate for US businesses in Myanmar, who asked not to be named for security reasons.
Investors would back more targeted sanctions against the coup-makers and those named as high-level officials by the military after its takeover, the advocate said, sending a signal that the new administration in Myanmar is illegitimate.
But former officials and experts say the United States has limited leverage over the generals that seized power, who have ties to powerful local companies but few overseas interests that could be impacted by financial sanctions.
The effectiveness of past sanctions on Myanmar's generals is also debated, with some arguing it left them largely untouched while impoverishing the wider population. Most of Myanmar's top generals are already sanctioned under the Global Magnitsky Human Rights Accountability Act.
“Simply piling more sanctions on the Burmese military won’t solve this problem,” Daniel Russel, the top US diplomat for East Asia under Obama.
“Sustained and skillful diplomacy, both bilateral and with partners, is needed to defuse the crisis and to chart a path back to democratic governance and reform in Myanmar."