The weaponization of economic instruments for geopolitical means isn’t a new policy but it’s become the favored approach of the Trump Administration over the past two years, though nowhere with as much fervor as what’s being done to Iran right now. The President and his team proudly brag that these are the toughest sanctions that the US has ever promulgated, and notwithstanding the few temporary waivers that they issued, that’s true.
The US wants to cut off Iran’s access to international financing in order to compel it to make foreign policy concessions as a result of what they predict will be intensified grassroots pressure once the general population begins to suffer. Of course, Washington insists that these sanctions won’t harm average Iranians, but it’s impossible to consider that a credible statement because they’ll be the first people to bear the brunt of these sanctions if their government curtails any of its social and infrastructure spending in the face of an impending economic crisis caused by Trump’s policy. The waivers have certainly bought the country some time, though, and it’s possible that workaround channels and the use of national currencies in all transactions will help cushion the blow of this asymmetrical attack against it, but the real danger to Iran’s partners comes from the US’ threatened “secondary sanctions”.
Secretary of State Pompeo promised that the US will ensure that it’s costlier for any country or company to do business with Iran than to cut it off, warning that any violators would be banned from working with American entities. This could conceivably bring enormous economic hardships to foreign firms that depend on the US marketplace for much of their revenue, thus pressuring them to curtail and ultimately close their Iranian operations. At the same time, however, the opportunity has now arisen for multipolar states such as Russia and China to resist the US and make tangible progress in strengthening the basis for an alternative non-Western financial system, meaning that unlike Bush’s anti-Iranian sanctions, Trump’s might possibly backfire.
To discuss this issue in more detail, Andrew Korybko is joined by Don Harder, an American and naturalized Russian citizen who has lived in St. Petersburg since 2004, and Pouya Sharif, an Iranian student activist from Germany.
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