The Cost Of U.S. Sanctions On Iran


In a news conference on 10 January 2020, Treasury Secretary Steven Mnuchin and  Secretary of State Mike Pompeo reported that a new wave of sanctions would be placed against Iran. Under executive orders of President Donald Trump, Mnuchin detailed these sanctions to target Iranian construction, textile, mining, and manufacturing sectors. In addition, these sanctions are aimed to target eight senior Iranian officials. Pompeo stated the motive of such sanctions “is to deny the regime the resources to conduct its destructive foreign policy.” In addition Pompeo also declared, “We want Iran to simply behave like a normal nation.”

Such sanctions come two days after multiple airstrikes in Iraq on 8 January 2020 launched at the Al Asad and the Erbil Airbases where the American military is ever present. Such strikes were executed under the military code of Operation Martyr Soleimani, showcasing the motives for the operation inextricably linked to the 3 January 2020 airstrike in Baghdad, which took the life of former Iranian Major General Qasem Soleimani. In addition, just days after Soleimani’s death, Iran announced it would no longer comply with the Iran Nuclear Deal, formally known as Joint Comprehensive Plan of Action (JCPOA). With the trajectory of the conflict in mind, Trump’s plans to implement an embargo on Iran is hardly surprising to the international community. The embargo is supposedly designed to pressure the Iranian government into new nuclear agreements by pushing the already fragile economy to its limits. However, those who pay the highest price for these sanctions are neither Iranian officials nor American politicians, but the civilians.

Sanctions are nothing new in Iran, as the country has been a primary receiver of hostile economic war tactics from the West for years, largely revolving over nuclear weapons agreements. However, 2016 presented a significant turning point as the Obama administration spearheaded a deal that would facilitate the end of years of economic penalties on Iranian economy. That year, Iran’s GDP growth jumped by +13.4 percent, following a  -1.3 percent growth rate in 2015. However, this growth was short lived with the renewal of sanctions by the Trump Administration in August of 2018. In consequence, Iran’s GDP growth in 2018 was -4.8 percent and an estimated -10 percent in 2019. The value of Iran’s currency, the rial, has fallen tremendously. In consequence, prices of regular goods, as well as oil, have skyrocketed. In a recent Washington Post article, How U.S. sanctions are paralyzing the Iranian economy, it was reported that in just one year the “the price of beef and veal has risen from the equivalent of $5.20 per kilogram to $7.70.” Other everyday goods like milk and tea have also seen rises in cost. Overall, the article suggests that the cost of regular goods has almost doubled since 2016. Furthermore, U.S. sanctions have more directly, and indirectly come at a tremendous cost for the average Iranian citizen. Those at the lowest end of the socio-economic scale are at risk of being pushed further into the depth of poverty with the continuation and acceleration of the sanctions. 

The International Monetary Fund has estimated zero growth for this coming year. However, the future of political and economic status in 2020 is yet to be determined. Just a day after announcing the pending sanctions President Donald Trump went to twitter to express the following: “To the brave, long-suffering people of Iran:  I’ve stood with you since the beginning of my Presidency, and my Administration will continue to stand with you.” Although President Trump claims to be with the Iranian people, his actions throughout his presidency have consistently proven otherwise. In order to better ensure the welfare of Iranian citizens, there must be solutions which do not involve pushing the economy to it’s limits. Economic warfare can no longer be overlooked by the international community especially since it comes at the highest cost to civilians.