By William Tucker
Contributor, In Homeland Security
On Nov. 5, President Trump followed through on his plan to re-impose sanctions on the Islamic Republic of Iran after he pulled the U.S. out of the 2015 Iran nuclear deal.
By way of explanation, Secretary of State Mike Pompeo was quoted in USA Today as saying, “Our objective is to starve the Iranian regime of the revenue it uses to fund violent and destabilizing activities throughout the Middle East and, indeed, around the world. The Iranian regime has a choice: It can either do a 180-degree turn from its outlawed course of action and act like a normal country, or it can see its economy crumble.”
The sanctions levied against Iran are quite substantial, including 400 targets in the shipping and energy sector, 50 banks and their subsidiaries and 250 individuals. That’s a total of 700 entities. The administration has now levied sanctions on more than 900 Iranian targets since Trump took office in January 2017. According to the Treasury Department, this is the “highest-ever level of U.S. economic pressure on Iran.”
The administration issued temporary waivers for eight nations — India, China, South Korea, Japan, Italy, Greece, Taiwan and Turkey — that are currently dependent on Iranian oil. But these waivers are only good for six months and are not likely to be renewed. Seven of the eight nations are Iran’s largest crude oil customers.
Short-Term Reprieve from Sanctions Will Not Help Iran in the Long-Run
However, since the U.S. withdrawal from the Iran nuclear deal, the mere threat of sanctions has sent the Islamic Republic’s economy into turmoil. The short-term reprieve from these sanctions will not help Iran in the long-run, not that they are meant to. The waivers are intended to give those purchasing nations extra time to procure their crude oil elsewhere.
Several European nations, China and Russia have stated that they would maintain the Iran nuclear deal without the U.S. The European nations even pledged to work with Iran economically despite the U.S. sanctions. But that small act of defiance from Europe quickly fizzled out because European importers cannot afford to anger the largest consumer market on the planet. So Iran is on its own in facing what amounts to a near total economic blackout imposed by the United States.
This may seem like a peculiar characterization. But remember that Iran is extremely dependent on its crude oil exports, and although Tehran has retained its top energy consumers, the Iranian economy is suffering and causing domestic political turmoil along with it.
For its part, Iran views the sanctions as something akin to an act of war. “We are in an economic war situation. We are standing up to a bullying enemy,” Iranian President Hassan Rouhani said in a televised speech after the sanctions were announced in Washington. Rouhani went on to state that Iran must “resist.” But his ability to do so will devolve to other elements of Iranian national power, such as covert operations aimed at undermining U.S. interests in the Middle East.
Countermove by Iran Could Result in Armed Conflict in the Region
Some experts are worried that any such a countermove by Iran would result in yet another armed conflict in a region that has witnessed some of the most horrendous fighting since the beginning of the 21st century.
Indeed, Rouhani may be correct in characterizing U.S. sanctions as an act of economic warfare. Sanctions are simply a contemporary blockade aimed at starving a nation into changing its behavior or weakening it to the point that its will to resist fails.
For Western democracies, sanctions have long been the tool used in lieu of violent armed conflict to influence behavior peacefully, but their usage is hardly benign. Furthermore, even if sanctions do not always bring the desired results, they do allow for minimal action when a government feels compelled to do something.
Iran’s past behavior and the uptick in alleged clandestine acts suggest that Tehran will do more than simply try to weather this storm. The political issues behind the economic downturn may prove too difficult to manage without countering in some way. One problem is that these moves and countermoves run the risk of escalating into a confrontation that goes beyond economics.