Wednesday, September 11, 2019

Trump's Iran Policy Is Working

Here are a few facts, for your edification. I wrote a couple of days ago about French and European efforts to circumvent the American sanctions on Iran. French President Emmanuel Macron seems never to learn.

But then we have an analysis of the impact of the Trump administration policy. It comes from the Wall Street Journal’s Gerald Seib. As Washington bureau chief Seib does not offer opinion, only straight up analysis, often the best in the business.

So, he writes that the Trump administration sanctions are working, and that Iran is in serious economic distress:

It is becoming increasingly clear just how effectively the Trump administration’s campaign of economic sanctions is shredding the Iranian government’s balance sheet and damaging the underlying economy. You may agree or disagree with the strategy, and where it is taking things is unclear, but its impact is no longer in doubt.

While precise figures are elusive because some black-market trading persists, Iranian oil exports likely have been reduced to about 200,000 barrels a day, and actually were lower than that at some points this summer. That’s down from roughly 2.5 million barrels a day when President Trump announced in May 2018 that the U.S. was withdrawing from the nuclear deal President Barack Obama and other world leaders negotiated with Iran, and began imposing new sanctions to stop companies and countries from buying Iranian oil.

How is that impacting the Iranian economy:

The ripple effects are spreading out across the economy. The International Monetary Fund estimates the Iranian economy will shrink 6% this year. Meanwhile, a declining Iranian currency is driving up inflation; consumer prices will climb 37.2% this year, the IMF estimates.

The budget crunch raises new questions about how Iran’s government will continue paying for a broad range of subsidies designed to keep down the prices of everything from gasoline to food. Analysts estimate that 17 of 18 national retirement funds are in the red. Meanwhile, inflationary pressures are putting housing out of reach for many Iranians.

Now, the Trump administration is increasing the maximum pressure:

And there’s no sign the Trump administration is doing anything but escalating the pressure. This spring, it stopped providing waivers to nations such as China, India and Turkey that allowed them to keep buying Iranian oil temporarily in order to wind down purchases and find alternate sources.

Just last week, the U.S. blacklisted dozens of Iranian-owned oil takers, companies and insurance firms that the U.S. said are controlled by Tehran’s Quds Force, a military unit the U.S. has designated a terror group. In the last few days, Sigal Mandelker, the Treasury Department’s undersecretary for terrorism and financial intelligence, has been visiting Persian Gulf nations to warn companies there against participating in black-market oil shipments from Iran.

While everyone is transfixed by the drama coming out of the White House, the administration’s Iran policy is having a marked effect on that country. Compared to the Obama policy of appeasement, there is no comparison.


Sam L. said...

OH NOOOOOOOOOOOOOOOOOO. Trump is destroying all the "good" that Obama did!!!111!!!!
I like that.

UbuMaccabee said...

MAGA. The economic equivalent of driving a battle axe in the face of the mullahs. MAGA