Iran sanctions by the US will threaten thousands of Jobs in Europe and in the US. Donald Trump has stated his intentions to apply sanctions on Iran if it fails to halt its nuclear development. US sanctions on Iran can lead to two unwanted consequences.
Consequences of US Iran Sanctions
European firms that committed themselves to meeting Iran’s need for a number of goods and services will find themselves in trouble. Trump appears to have little interest in Europe and how it would be affected by his unilateral approach to world politics. Existing sanctions were lifted on Iran in 2015 in order to control Iran’s development of enriched uranium a nuclear fuel. President Trump announced on May 8th that the US would withdraw from this deal.
The Iran deal is like many deals and arrangements made or continued under the Obama presidency. Trump has withdrawn from them and stated them to be ‘bad’ or ‘insane’. Unfortunately, the Iran deal is still supported by the UK, EU, Russia, and China.
Only the US has withdrawn from it. This withdrawal will put thousands of European jobs at risk. It’s not only the US that may suffer from its President’s actions but the entire EU – and potentially Russia and China. Let’s also not forget American unemployment! Iran sanctions may have little effect if carried out unilaterally.
Rewording of the EU Blocking Statute
So much for diplomacy and statesmanship! Not only that, but President Trump has threatened British and EU businesses with a boycott in the US market unless they follow suit. He will likely find that his threats will be ignored. That could then lead to a trade war that the US would probably lose. Where would the US be without UK, EU and Chinese goods? It already relies heavily upon these areas for imports.
So what will the final result be? It will certainly raise many issues with US companies that rely on European and UK manufacturing units to supply to these areas. However, President Trump may be unaware of the EU “Blocking Statute” introduced in 1996 to counteract US sanctions against Cuba. EU officials are believed to be working on this to reword it so it also applies to this issue regarding US restrictions on businesses dealing with Iran.
UK and EU Firms May Ignore the US Iran Sanctions
Not all UK and EU firms agree with this, however, and might take a unilateral approach. The US has already placed large fines on European banks for processing transactions originating from Iran. This has tended to instill a “Who do they think they are!” attitude in UK and EU to the USA.
EU trade with Iran totaled around 10.8 billion Euros in exports, and10.1 billion euros in imports. The UK, France, and Germany state that they will continue to do business with Iran and if the US doesn’t like it then tough! US Iran sanctions may work, but they are more likely to fail.