Trump turns up heat on Iran

The US president has made Iran an outlaw state. Matthew Partridge reports.

Dr Matthew Partridge
By
published
in Features

942-Iran-634

The Iranian Revolutionary Guard: America says it is a terrorist group
(Image credit: Copyright (c) 2013 Shutterstock. No use without permission.)

On Monday the US designated the Iran Revolutionary Guard Corps (IRGC) "as a foreign terrorist organisation" as Washington "sought to increase the cost of Tehran's military adventurism", says The Times. The move, which has been "fiercely debated" within the administration for months, "is the first time the US has labelled a foreign state entity as a terrorist group". The IRGC is already under economic sanctions, but this new move "exposes anyone who supports or does business with it to criminal prosecution in the US".

A maximum-pressure campaign

Hold on, says David Gardner in the Financial Times. While the IRGC is clearly "not Iran's version of the Boy Scouts", it is "not clear what designating the IRGC as terrorists will do". After all, the Quds Force was already designated by the US as a supporter of terrorism in 2007. Ironically, many experts argue that the "economic distortions" created by existing international sanctions have helped the IRCG consolidate its business "empire". Trump's decision last year to pull out of the agreement that relaxed sanctions on Iran in return for it suspending nuclear enrichment "essentially re-empowered theguards and their hardline leaders".

Siding with the hawks

Even if Trump isn't re-elected next year, the designation will have implications beyond his presidency, says Eli Lake on Bloomberg. It makes it "much more difficult" for a Democratic president to revive the Iran deal, should they win in 2021.To lift the sanctions, any future administration "would have to make a determination that the IRGC was out of the terrorism business". Given that terrorism "is in the organisation's nature", such a reversal would be like saying that "the IRS is no longer engaged in collecting taxes". In effect, Trump has designated Iran an "outlaw state".

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Dr Matthew Partridge
Dr Matthew Partridge
Shares editor, MoneyWeek

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

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