Trump’s Iran Policy Meets Economic Reality

The Iran nuclear deal was a cornerstone of Barack Obama’s foreign policy legacy, but it ultimately fell victim to circumstance. In May 2018, Donald Trump’s administration withdrew from the accord, citing concerns over Tehran’s ballistic missile program and regional behavior. The move sparked widespread criticism from European allies and led to the reimposition of tough economic sanctions on Iran.

The US has targeted Iran’s oil exports, which account for roughly 80% of the country’s revenue. By choking off funding for Tehran’s military and nuclear programs, Washington aims to isolate the regime economically. However, this policy has had a devastating impact on ordinary Iranians, who are struggling to cope with rising food prices, unemployment, and poverty.

Oil prices spiked in response to the sanctions, benefiting major producers like Saudi Arabia but hurting consumers worldwide. The EU has struggled to find ways to circumvent US restrictions on Iranian oil sales, and European companies have been forced to pull out of Iran due to concerns over doing business under sanctions. Deutsche Bank, Maersk, and Total are among those that have withdrawn from the country.

Markets hate uncertainty, and Trump’s policy has provided plenty of it. The introduction and escalation of sanctions against Iran sent oil prices soaring in April 2020, reaching their highest level since 2014. Currency fluctuations have also been significant, with the Iranian rial plummeting by as much as 80% against the US dollar.

Regional dynamics have played a role in shaping Washington’s policy toward Tehran. Neighboring countries like Saudi Arabia and Turkey have seen their relationships with the US grow stronger as a result of Trump’s approach, but this has not come without costs. Riyadh has been forced to pump more oil to meet the shortfall caused by reduced Iranian exports, exacerbating its own fiscal woes.

In the aftermath of Trump’s decision, regional politics became even more complicated. Israel welcomed increased pressure on Iran’s nuclear program, but the consequences for civilians in Gaza and Lebanon have been severe. The humanitarian toll is undeniable: food prices have risen sharply, as have rates of poverty and unemployment.

The human cost of Trump’s policy cannot be overstated. With access to healthcare severely restricted due to sanctions, Iranians are struggling to cope with the pandemic that has swept through the country. In 2020, at least one hospital in Tehran reported a surge in patients seeking treatment for COVID-19 complications.

As medicine is scarce and prices skyrocketing, it is not surprising that ordinary Iranians feel abandoned by their government and the international community alike. The same applies to education: since the US withdrew from the nuclear deal, Iran has seen an increase in student protests over rising costs and declining standards of living. Civil liberties too have suffered under pressure from a regime intent on maintaining its grip on power.

The Clinton administration imposed economic sanctions on Iraq in 1990 with the aim of coercing Saddam Hussein into abandoning his nuclear ambitions. However, this policy inadvertently created a humanitarian disaster that left hundreds of thousands dead. Critics argue that Trump’s policy towards Iran amounts to an updated version of these failed approaches – one that relies on coercion rather than diplomacy.

In contrast, Obama-era efforts at engagement – including the 2015 nuclear deal – have been more nuanced in their approach, offering carrots as well as sticks to encourage Tehran to alter its behavior. Ultimately, there is little indication that Trump’s Iran policy has achieved its desired outcomes. Instead of bringing about regime change or forcing Tehran back into talks, Washington’s approach seems to be pushing the country deeper into isolation.