The only clear economic winners flowing from Trump’s decision are Russia and China. They will continue to trade with Iran, and will reap the commercial benefits that might have flowed to U.S. or European firms. Others—Turkey and India among them—will look away as their companies trade with Iran, and corruption and illicit trade will flourish. Meanwhile, Iran will continue to find enough economic sustenance from these sources to help it withstand the U.S.-imposed sanctions, even as it hardens its economy against the impact. They have suffered through worse. Finally, it will threaten a return to its nuclear program, with the rest of the world saying, “Can you blame them?”
And on top of steel and aluminum tariffs, auto tariffs, intellectual property sanctions, and the redoing and undoing of the world trading system that the United States has championed since the Bretton Woods Conference of 1944, global businesses will now have to act as private policemen enforcing sanctions against Iran that many of their own governments don’t support. In a world where markets are already frothy and profits and values are pumped up by tax givebacks and stimulative government deficits, and where famous debtors like Argentina are once more returning to the IMF for support programs, business hardly needs the further uncertainty imposed by a new and severe sanctions regime.
And—oh yes, lest we forget—Trump’s impetuous and unwarranted withdrawal will make the world less safe, the chance of regional stability in the Mideast less certain, and the risk of violent conflict higher still.
Frank G Wisner was a career foreign-service officer who served eight presidents. He was a four-time ambassador, and also under secretary of defense for policy and under secretary of state for international security affairs. He is now an international affairs advisor at Squire Patton Boggs, an international law firm.
Nelson W. Cunningham has served as an advisor to Joe Biden and John Kerry and served in the White House as special advisor to President Clinton on trade and Western Hemisphere affairs. He is the president of McLarty Associates, an international strategic advisory firm based in Washington, DC.
Image: Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., April 10, 2018. REUTERS/Brendan McDermid