LONDON: Companies doing business with Iran will be barred from the US, President Donald Trump said on Tuesday, as a raft of new sanctions on Tehran were introduced in a move expected to push the economy to the “point of collapse.”
The new measures target areas such as Iran’s purchases of US dollars and its auto sector, and will be followed in November by sanctions affecting oil exports.
“These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will not be doing business with the United States. I am asking for world peace, nothing less,” Trump tweeted on Tuesday.
The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!
— Donald J. Trump (@realDonaldTrump) August 7, 2018
The measures will have a limited effect on US companies, as few do significant business in Iran, with the impact more closely felt among European and Asian firms. France’s oil major Total and automakers PSA and Renault have already suspended investments in Iran, and were followed on Tuesday by Daimler, which is also halting its business in Iran.
Analysts said the new sanctions would hit Iran’s already battered economy, risking further public protests against the government.
“I believe that not only will the economy reach a point of collapse, but that there will be more demonstrations across Iran, perhaps even mass demonstrations,” Alireza Nader, an independent Iran scholar based in Washington, told Arab News. “The regime will soon see its biggest existential crisis ever.”
Other analysts said Iran could intensify its regional military interventions.
“Tehran might respond to the sanctions by stoking tensions in the region, including in Yemen, Syria and Lebanon,” said Jason Tuvey, emerging markets economist at Capital Economics.
Naysan Rafati, Iran analyst at the International Crisis Group in Washington, noted Iran’s warning last month about its ability to close off the Strait of Hormuz in retaliation to US pressure.
“If sanctions — and the key here will be the sanctions against Iran’s oil exports — really start to impact Iran’s economy, there’s certainly a possibility that Iran will respond,” he said.
“There are also several flashpoints across the region, from Yemen to the Golan Heights, where we could see an inadvertent clash between Iranian or Iran-backed forces and US allies that leads to a wider escalation.”
However, Ghanem Nuseibeh, founder of the London-based strategy consultancy Cornerstone Global Associates, said Iran’s options for retaliation were limited, in part due to the impact of the sanctions.
“There are few practical things Iran can do. They have failed diplomatically to get the Europeans to stand for them and they are practically facing isolation,” he said.