President Donald Trump‘s efforts to isolate Iran through new international sanctions will also harm some of America’s closest allies and other major world powers — a prospect top U.S. officials acknowledge as a hardship but dismiss as a necessary policy change.
As a result of withdrawing from the Iran nuclear deal in early May, the Trump administration will begin enforcing new sanctions by Nov. 4 on most companies and countries that do business with Iran and its $50 billion in annual exports, two-thirds of which are for oil. Secretary of State Mike Pompeo outlined in a speech last month that “these will be the strongest sanctions in history by the time we are done.”
China, India, South Korea, Japan and France have become the largest investors in Iranian goods since 2015, according to the latest figures compiled by The Observatory of Economic Complexity, when the agreement brokered by the Obama administration limiting Iran’s nuclear program opened up its markets. Now the Trump White House expects countries doing business with Iran, particularly its oil sector — not just China, France, Germany, Russia, the United Kingdom and the European Union, who signed the Iran nuclear deal in 2015 — to adhere to the new U.S. demands.
“We’re asking them to make a policy change,” a senior State Department official told reporters on Tuesday, speaking on the condition of anonymity. “The reason they are willing to do that in my view is because of their relationship with us. And I think they genuinely understand that the secretary and the White House aren’t kidding about this.”
While it’s yet unclear whether any country is willing to abide by the sanctions, China would stand to lose the most, according to the OEC. It invests $13 billion in Iran annually, 62 percent of which is in crude petroleum. Major U.S. allies India, South Korea, Japan and France are the next greatest purchasers of Iranian oil, accounting for a combined total of $16 billion annually.
| Country | Imports from Iran (in millions) | Percent of Iranian imports spent on oil | Percent of total oil imports from Iran |
| China | $13,400 | 62% | 8.2% |
| India | $7,510 | 81% | 11% |
| South Korea | $4,160 | 98% | 9.9% |
| Japan | $2,970 | 98% | 6.3% |
| France | $1,390 | 94% | 9.4% |
Source: The Observatory of Economic Compexity
American diplomats including Pompeo have traveled to meet with key allies in recent weeks to explain U.S. expectations of them. The State official claimed without providing evidence Tuesday, “Our allies are aware of our concern, they share it, they want to work with us.” The U.S. expects oil imports to “go to zero, without question” by the U.S. imposed deadline in November, the official said, adding “their countries will be subject to the same sanctions that everyone else is on if they engage in those areas of their economies that are sanctionable.”
India, however, has already indicated it plans to ignore Trump’s sanctions. Other signatories –who are still trying to uphold the agreement, based on the idea that it is a limited but essential tool to containing Tehran — have argued the U.S. demands are illegal and should be blocked or arbitrated in international court.
“We should know that the effects of the announced American sanctions will not remain without consequences,” Jean-Claude Juncker, the president of the European Commission, said at a European Union summit in May, according to The New York Times. “We have a duty to protect our European companies.”
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The White House has consistently asserted that the agreement did not do enough to limit Iran’s meddling in other parts of the Middle East and its support for regimes like Bashar Assad in Syria or militant groups like Hezbollah — though those goals were not included in the nuclear accord.
Experts warn Trump’s decision angers the world’s leading powers and risks undermining its own interests, including securing the U.S. dollar as the world’s reserve currency.
“It is one thing for the U.S. to invoke national security or other grounds as a rationale to impose punitive trade sanctions on a country, including prohibiting American persons and companies from engaging in transactions with the designated state,” wrote Brahma Chellaney, a professor at the New Delhi-based Center for Policy Research, in an op-ed in the Japan Times earlier this month. “It is quite another for the U.S. to use extraterritorial sanctions to block trade and financial activities by non-U.S. parties with that country — in other words, to coercively turn national actions into global measures, in breach of the sovereignty of other states.”
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Trump’s Iran Sanctions Will Hurt Key Allies, Powers originally appeared on usnews.com
