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.


Donald Trump: not a big hit in Iran
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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So, it's not surprising that, having withdrawn the US from the deal in May, he has now reimposed a "series of tough economic sanctions" that include banning Iran from using US currency, barring trading in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.

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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".

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri