Sunday, 18 November, 2018

America’s attachment to Iranian sanctions exposes its hypocrisy

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By Daniel Savickas

Last Wednesday the Iranian foreign minister, Javad Zarif, took to criticizing the Trump administration’s recent imposition of new sanctions against his country. Zarif blasted America’s “addiction to sanctions” and increasing hostility towards Tehran. Unfortunately, in this case, Zarif is absolutely right. The U.S. has become far too reliant on sanctions as a means of economic coercion, and its focus on Iran is becoming extremely counterproductive.

The latest round of penalties, announced this past week, targets a vast Iranian financial network, as well as countries that do business with Iran. They target a wide range of commodities, as well as investment in the country. Multiple large Iranian banks are at the center of the measures, as well as Iran’s largest tractor and steel manufacturer. The plan, announced by the Treasury Department, seems to be aimed at cutting Iran off from the rest of the world.

This is just the latest installment in this prolonged attack on the Iranian economy. The first round of sanctions was announced in August. It reimposed all of the previous penalties that had been lifted at the signing of the Joint Comprehensive Plan of Action (JCPOA), also known as the “Iran Deal.” Those sanctions effectively banned any transaction with Iran that involved U.S. products, and banned the import of certain Iranian commodities.

The Iranian regime said then, as it says now, that these actions would harm the well-being of the people of Iran, and are cause for humanitarian concern. Earlier this month, the International Court of Justice (ICJ) agreed with Iran, and ruled the U.S. sanctions were far too tough on humanitarian goods and Iranian civil aviation. The Iranians claimed vindication. The U.S. decided to double down instead with this latest action.

Whether or not one agrees with the ICJ’s conclusions is completely beside the point. In the eyes of most of the world, the U.S. handed Iran the moral high ground, and has decided to push forward nonetheless, as if that will change a thing. Instead of holding the Iranian regime accountable for its actions, which is ostensibly the goal of these sanctions, it lets them off the hook and gives them a scapegoat. It is incredibly counterproductive.

The consequences for the U.S. foolishness in this regard go far beyond mere rhetorical defeats. The Energy Information Administration said that due to market reactions to these new sanctions, it is likely to become more expensive for Americans to heat their homes this winter. When American lawmakers try to play central planner and pick winners and losers in the market again, it will end as it almost always does; it will hurt U.S. consumers.

Forbes also notes that the market uncertainty surrounding these sanctions makes it a particularly good time for investors to invest in Russia. Russia’s stock prices are already fairly low, and the country has large holdings in energy companies. The sweet irony of this all is that Russia has been one of Iran’s closest strategic and economic allies in recent years. Not only have the sanctions failed to create the world order the U.S. was clearly seeking, but other nations are now capitalizing off of American foolishness.

Some nations are also outright stipulating that they will not comply with U.S. demands. India receives 18 percent of Iranian exports. They have already announced they will not slow business with Iran, as they are the second largest importer of Iranian goods in the world, behind China, who receive 30 percent of Iranian exports. China announced it would slow imports slightly, but would not do so to the extent that it would bring them into compliance with U.S. sanctions. Other nations are rightly deciding they won’t hurt their consumers in the way the U.S. has.

Frankly, the demand itself risks hurting our relationships abroad. The U.S. is already embroiled in a petty tariff conflict with the Chinese, our largest trading partner. Now, the U.S. is asking that other countries, particularly in Asia and Europe, to upend their trade relationship with a key exporter to satisfy America’s geopolitical goals. The fact that emerging economic powers will not comply should be a signal to the U.S. that these actions not only stifle economic growth in Iran, but in the rest of the world as well. However, if the administration’s actions on trade are any indication, this is a lesson they are not intent on learning.

In the end, these sanctions will have a significant impact on the Iranian economy. However, the damage will also spread to America’s allies and within its own borders. America’s attachment to sanctions only exposes its hypocrisy, undermines its original intent, and causes undue collateral damage. Yet, time and time again, it continues to deploy this tactic to try to subjugate foreign adversaries. Unfortunately, it is as Zarif aptly described it: an addiction. As with all addictions, it needs to be halted before it causes real, lasting damage to us and those around us.

Daniel Savickas is a federal affairs manager at FreedomWorks. He can be reached at dsavickas@freedomworks.org.

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