Barack Obama’s administration succeeded in putting together coordinated international sanctions on Iran. Those restrictions sunk Iran into a recession and ultimately drove it to negotiations with the international community that resulted in the Joint Comprehensive Plan of Action (JCPOA), as the Iran deal is formally known. Trump’s sanctions, strong though they are, are unlikely to have the same impact, primarily because they don’t have the same kind of international cooperation. But Trump administration officials have met with their counterparts from more than 20 countries to discuss the sanctions, working to build a coalition against Iran. “What I can tell you very specifically is that we have made it very clear that we’re going to aggressively enforce this executive order and the other authorities that we have pursuant to statute,” a senior administration official said in a background call to reporters Monday. “We will work with countries around the world to do so, but make no mistake about it, we are very intent on using these authorities.”
France, Germany, and the U.K. have criticized the U.S. withdrawal from the JCPOA. They say, and indeed Trump administration officials concede, that Iran is complying with the accord. The Trump administration says the Obama-era agreement does not go far enough to stop Iran’s regional meddling, its missile program, and the threat it poses to Israel. The deal’s other signatories—including China, Russia, and the EU—say the JCPOA was meant only to address the threat of Iran’s nuclear program, which it did.
The U.S. sanctions that were announced Monday targeted Iran’s industrial sector, transactions involving U.S. dollars, Iranian rial, and the issuance of Iranian sovereign debt. The strictures also punish Iran’s civil-aviation sector and, more significantly, auto manufacturing. Iran’s economy, long hobbled by international sanctions, will almost certainly be adversely affected—though the most severe U.S. sanctions, which target Iranian oil exports, will go into effect in November. The United States says the goal of its sanctions is to pressure the Iranian regime into talks with the U.S. on all issues, including the nuclear program; its political and military involvement in Syria, Yemen, Lebanon, and Iraq; its threats against Israel; its ballistic-missile program; and its dismal human-rights record. But Iran says it will not talk to the United States while under sanctions and while the U.S. is outside the JCPOA.
The EU, which wants to preserve the nuclear deal, has come up with its own so-called blocking mechanisms that would penalize European companies that comply with the U.S. sanctions. But EU officials concede that there is little they can do to compel the largest European companies, whose business operations span the globe and which rely heavily on the U.S. dollar for the international transactions, to defy the Trump’s administration’s measures. Ultimately, the prospect of a loss of access to the U.S. market is far more daunting than the potential loss of Iranian consumers. But what the EU could do is encourage its smaller firms that have limited exposure to the U.S. to do business in Iran. Although those firms will be unable to provide the financial windfall that the JCPOA promised the Islamic Republic, they will allow the EU to say that it is keeping with the spirit of the agreement, which ensured economic and political benefits to Iran in exchange for a freeze on its nuclear program.