Global Economy

U.S. Hits Iran With Renewed Sanctions



WASHINGTON—The U.S. moved to reimpose punishing sanctions on Iran and threatened even-tougher measures for later this year as the Trump administration sought to increase pressure on the Tehran regime to negotiate or step aside.

Trump administration officials publicly maintain that the campaign isn’t aimed at regime change, even as thousands of Iranians protest a deteriorating economy. But senior U.S. officials have repeatedly depicted Iranian leaders as corrupt ideologues and declared that Iranians should have the right to pick their own government.

President Trump signed on Monday the executive order restoring the sanctions, the broadest economic action the U.S. has taken against Tehran since the president in May said the U.S. would withdraw from the 2015 Iran nuclear accord, which had lifted them.

The sanctions will remain in effect, U.S. officials said, unless Tehran meets a dozen stringent demands, including that it cease its support for militant groups in the Middle East and end its enrichment of uranium.

Whether the administration’s calculation—that it can, in effect, drive a hard bargain with Iran or weaken the regime so it retrenches—pays off will depend on how vigorously the sanctions are enforced and whether Iran is able to circumvent them.

Hours after Monday’s announcement, European officials registered their opposition to the new sanctions. They said the remaining parties to the Iran agreement—Russia, China, Britain, France, Germany and the EU—would work to maintain financial channels with Tehran and facilitate Iran’s continued exports of oil and gas.

“Preserving the nuclear deal with Iran is a matter of respecting international agreements and a matter of international security,” said the statement, which was issued by

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Federica Mogherini,

the top foreign-policy official for the European Union, and the foreign ministers of Britain, France and Germany.

While the threat of sanctions is prompting many European companies to withdraw from the Iranian market, China is likely to remain a major importer of Iranian oil.

“Trying to enforce a strangulating sanctions regime on Iran without even a de facto cooperative relationship with China is going to be very, very difficult,” said

Jarrett Blanc,

who worked at the State Department on implementing the 2015 deal during the Obama administration.

The new measures, which will take effect just after midnight on Tuesday, bar the sale of U.S. currency to Iran’s government, sanction Iran’s trade in gold and precious metals, outlaw the purchase of Iran’s sovereign debt and sanction Iran’s automotive sector.

Iran will also be banned from selling or acquiring aluminum, steel and other industrial materials. Imports of Persian carpets and pistachio nuts to the U.S. are also prohibited.

Unless Iran complies with the U.S. demands, far-tougher steps will take effect on Nov. 5, when the U.S. would aim to cut off Iran’s oil exports and impose sanctions on Iran’s shipping, among other measures.

While U.S. intelligence says the 2015 agreement has extended the time it would take Iran to produce enough fissile material for a nuclear bomb to a year from a few months, the Trump administration asserts the agreement was insufficient in limiting Tehran’s nuclear ambitions.

The Trump administration has also zeroed in on the country’s destabilizing activities in Syria and other countries in the Middle East as cause for its decision to withdraw from the agreement. Those activities weren’t covered by the 2015 deal, and it is unclear whether the sanctions will compel Iran to pull back or merely add to the hardship of the Iranian people and prompt the regime to double down on its repression at home.

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Mr. Trump has said he is willing to meet with Iranian President

Hassan Rouhani

to see if they can strike another, more comprehensive deal.

But some senior U.S. officials appear to have little expectation that sanctions will lead to a new round of diplomacy. Instead, they seem to be calculating that the economic pressure will undermine the Iranian government and encourage the Iranian public to seek new leaders.

“Hey, we’re happy to talk if there’s an arrangement that is appropriate,” Secretary of State

Mike Pompeo

said Sunday. “But there’s no evidence to date of their desire to change and behave in a more normal way.…We want the Iranian people to have a strong voice in who their leadership will be.”

Mr. Rouhani railed against the new sanctions in a televised speech on Monday, saying the U.S. owed Iran an apology for pulling out of the multilateral nuclear accord.

He said Iran would emerge from the sanctions in good health, and would continue to seek peace and better relations with its neighbors. “The more we are united, the shorter the sanctions will be and the quicker they will break,” he said.

Mr. Rouhani dismissed the idea of talks with the U.S., saying the U.S. had to rebuild trust and remove sanctions before political negotiations were possible.

Petroleum exports account for nearly a fifth of Iran’s gross domestic product, and the November sanctions will prohibit oil and natural-gas trade with the country, unless the U.S. grants waivers.

Those measures are also to be combined that month with sanctions against Iran’s shipping industry, ports, its central bank, insurance industry and the financial-messaging services that connect Iran’s banking system to the world.

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The Trump administration has said it expected Iran’s oil buyers to begin winding down purchases on Tuesday in response to the looming sanctions.

While the new sanctions are less severe than the planned November round, they will offer an early test of the administration’s determination to enforce a new sanctions regime and on Iran’s ability to evade it.

“I think it’s going to just breed loopholes, even amongst some of our closest allies,” said

Richard Nephew,

a former deputy coordinator for sanctions policy at the State Department during the Obama administration.

Despite the Europeans’ tough words, some expect them to move cautiously in challenging the White House.

“They want to maintain trade, especially fuel, and to keep some semblance of the nuclear deal, which they see as key to security, said

Rachel Ziemba,

adjunct fellow at the Center for a New American Security think tank. “However, they are also reluctant to punish companies for business decisions that are being made by private-sector actors.”

Write to Michael R. Gordon at michael.gordon@wsj.com

Appeared in the August 7, 2018, print edition as ‘U.S. Hits Iran With Renewed Sanctions.’



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