Features

Trump imposes sanctions on Iran – but does it matter?

Donald Trump has imposed sanctions on Iran. But the measures are unlikely to achieve much. Matthew Partridge reports.

908-iran-634
Donald Trump: not a big hit in Iran

But the measures are unlikely to achieve much. Matthew Partridge reports.

Donald Trump previously called the 2015 Iran nuclear agreement, which lifted sanctions against the country in return for it suspending its nuclear programme, "horrible" and "one-sided", says the Financial Times.

So, it's not surprising that, having withdrawn the US from the deal in May, he has now reimposed a "series of tough economic sanctions" that include banning Iran from using US currency, barring trading in cars and metals and minerals that include gold, steel, coal and aluminium and aiming to prevent the country from buying US and European aircraft. Additional sanctions on Iranian oil exports are due to come into effect in November.

While these measures only apply directly to US companies that might do business with Iran, Trump has threatened "severe consequences" for firms elsewhere in the world that breach them.

Fracturing the global order

Trump may be right that sanctions will increase pressure on Iran as its economy "has been badly hit", says The Daily Telegraph. Countries such as Israel and Saudi Arabia will also welcome Trump's insistence that any new deal "must cover both the nuclear programme and support for terrorism".

However, by breaking with a deal favoured by Europe and the rest of the world, Trump is gradually dismantling "what used to be a unified Western approach to the threat posed by countries like Iran and Russia". Such actions are "fracturing the global order that has existed since 1945, with far-reaching consequences".

Perhaps this is the point, says Daniel DePetris in The Spectator. "Brussels is doing everything it can to salvage the situation, [such as] issuing blocking regulations, allowing the European Development Bank to invest in Iran", but European firms are voting with their feet, some even quitting Iran "before the first round of sanctions". Trump is therefore showing Europe that, while it "may rival the US as one of the world's wealthiest players", Washington "is still the preeminent actor with the power to compel some of the largest companies on the planet to reassess their position".

A blunt instrument

In Iran, the past few days have seen a number of large protests about the economy, suggesting that "many Iranians will blame the new measures on the shortcomings of the government" rather than on Washington, says The Times. "Iran hawks in the West, who have long advocated regime change", will take this "as a sign that popular support for the ruling clerics is seriously eroding", says Keith Johnson in Foreign Policy.

Yet many experts "believe the renewed US economic offensive could actually undermine the cause of protesters". That's because Trump's measures "are blunt weapons that punish the entire Iranian economy, as opposed to more narrow measures that punish the regime", says Eli Lake on Bloomberg. Washington would do well to remember that the protestors "are the best allies the Western world has" against the clerics and "consider some more targeted alternatives".

Zimbabwe's cynical election

When he took over from Robert Mugabe last year, Zimbabwe's president, Emmerson Mnangagwa, "spoke of a commitment to democracy, a zero tolerance to corruption, being open for business and that he would ensure free, fair and credible elections", says David Coltart in The Daily Telegraph.

This commitment has been "found wanting" after "old tricks were re-employed" to ensure that he was returned to office in last week's election, while his Zanu-PF party retained a majority in parliament. When the opposition contested the result, Mnangagwa "deployed soldiers to kill with live bullets in central Harare". But his victory may be pyrrhic, since it will now "be hard for democratic countries to embrace him as someone different to Mugabe".

Don't count on that, says Leonid Bershidsky on Bloomberg. "Any expectation of democratisation should have died long before Mnangagwa was declared victorious." As in Russia and Turkey, this was always going to be a case of "competitive authoritarianism" a vote with a "manipulated outcome" intended only to show that it "was closely fought and fairly won, so international financial institutions might have fewer doubts about Mnangagwa's legitimacy".

And the ploy will probably succeed, says The Economist. Sure, both America and the EU will "utter bromides" about reconciliation and "continue to list the ways in which the election was not fought on a level playing field". Yet the international community is likely to "overlook the political gamesmanship and violence" if "Mnangagwa shows he is willing to reform the economy".

Recommended

How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
The charts that matter: the stimulus tug of war continues 
Global Economy

The charts that matter: the stimulus tug of war continues 

As the world's government throw money at their economies, John Stepek looks at how it's affecting the charts that matter most to the global economy.
24 Oct 2020
Buying bitcoin could be the best way to play the remote working boom
Bitcoin

Buying bitcoin could be the best way to play the remote working boom

The coronavirus pandemic has accelerated the move to home working, flexible employment practices and the rise of the “digital nomad”. One of the best …
21 Oct 2020
I wish I knew what negative interest rates were, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what negative interest rates were, but I’m too embarrassed to ask

There’s been a lot of talk from the Bank of England recently about introducing “negative interest rates”. So what on earth are they, and what would th…
20 Oct 2020

Most Popular

The Bank of England should create a "Bitpound" digital currency and take the world by storm
Bitcoin

The Bank of England should create a "Bitpound" digital currency and take the world by storm

The Bank of England could win the race to create a respectable digital currency if it moves quickly, says Matthew Lynn.
18 Oct 2020
Don’t miss this bus: take a bet on National Express
Trading

Don’t miss this bus: take a bet on National Express

Bus operator National Express is cheap, robust and ideally placed to ride the recovery. Matthew Partridge explains how traders can play it.
19 Oct 2020
Three stocks that can cope with Covid-19
Share tips

Three stocks that can cope with Covid-19

Professional investor Zehrid Osmani of the Martin Currie Global Portfolio Trust, picks three stocks that he thinks should be able to weather the coron…
12 Oct 2020