News : Economy
- Published: Tuesday, 13 August 2019
By INU Staff
INU - Last year, US President Donald Trump pulled the United States out of the 2015 Iran nuclear deal, or Joint Comprehensive Plan of Action (JCPOA) as it is known. He said that the JCPOA was not effective and that it was in fact proving Iran with a huge amount of resources to expand its belligerence across the region.
Since pulling out of the deal, the United States has imposed a series of sanctions on Iran and key regime figures including the country’s foreign minister Javad Zarif and Supreme Leader Ayatollah Ali Khamenei.
However, probably the hardest hitting sanctions on Iran are those affecting its exports of oil. Oil is one of the country’s biggest sources of revenue, but most of it has been plundered on the financing of terrorist proxy groups across the region, the spread of chaos, the suppression of the people of Iran, the regime’s involvement in regional conflicts and wars, and so on.
For this reason, the Trump administration put measures in place to cut the regime off from funds that it uses to carry out these malign acts. And it is having an effect.
The United States is also obliging foreign countries to decide how they want to trade. This is also having a major effect on Iran. It has been reported that, for the first half of this year, Germany’s exports to the Islamic Republic have fallen by approximately a half.
The Federal Statistics Office shows that sales to Iran dropped by almost 50 per cent to 678 million euros ($758.8 million USD) year on year from January to June. Furthermore, imports from Iran went down to 110 million euros – a drop of around 43 per cent.
However, this news is not entirely surprising. When a country is faced with a choice between the United States and Iran, it does not come as much of a shock that many countries will choose the powerful American market. Germany is clearly not willing to open itself up to action from the biggest financial power in the world just to trade with Iran.
The European signatories of the 2015 nuclear agreement tried desperately to persuade President Trump to remain party to the deal, but he refused. The Europeans (France, Germany and the United Kingdom) vowed to put measures in place to lessen the impact of the US sanctions that would be re-imposed.
The reality of these measures was not quite what Iran expected. It set up a mechanism known as Instex that could be described as a barter-based trade conduit. However, Iran is not happy that it would only deal with the trade of goods that are not subject to US sanctions – food and pharmaceuticals, for example.
The US Secretary of State has called on all nations to take action against Iran now before it is too late. He explained that the expiration of the UN arms embargo on Iran is fast approaching and that action should be taken imminently before the Iran threat gets even more serious.