September 22, 2021
Trump administration sanctions on Iran decimated the hardline regime’s trade with the world’s largest economies, knocking it from $46 billion in 2019 to $28 billion in 2020, according to a non-public report sent by the Biden administration to Congress earlier this month.
The roughly $18 billion decrease in trade was a significant blow to Iran’s attempts to gain access to hard currency amid an ongoing cash crunch that has ruined the country’s economy and sparked nationwide protests. All told, the reimposition of sanctions, which began in 2018, decreased Iran’s trade by more than $70 billion.
The extent of damage caused by the Trump administration’s “maximum pressure” campaign on Iran was disclosed this month to Congress in an unclassified but non-public mandatory report, a copy of which was reviewed by the Washington Free Beacon. It demonstrates that sanctions on Iran leveled by the former administration prevented the Iranian regime from making profits, even as critics of the GOP-led sanctions claimed such measures were ineffective.
The disclosure comes as the Biden administration pursues negotiations with Iran and aims to ink a revamped version of the 2015 nuclear accord, which provided Iran with billions of dollars in sanctions relief. Iran is pushing U.S. officials to dismantle the former administration’s bevy of sanctions, which would provide the hardline regime with a cash lifeline. The Biden administration has signaled that it is willing to waive the most crushing economic sanctions on Tehran, drawing criticism from GOP hawks in Congress and others who say the United States is giving up its leverage on the regime.
The latest report was submitted to Congress under the Iran Sanctions Act of 1996, which requires the president to inform lawmakers about the dollar value of Iran’s trade with leading global countries known as the Group of 20. The significant decrease in trade occurred after the Trump administration invoked in August 2020 a mechanism known as “snapback,” in which all international sanctions that were lifted on Iran as part of the nuclear deal were reapplied.
The report also outlines U.S. trade with Iran, which dropped from $34.5 million in 2019 to $26.5 million in 2020. The majority of America’s exports to Iran are permitted by humanitarian waivers on sanctions and include agricultural goods, medicine, and medical devices. This trade continued with Iran as the coronavirus pandemic stormed the globe and ravaged Iran’s population.
Iran’s top trading partner is China, which in 2019 conducted more than $19 billion in trade with Iran. That number dropped to $12 billion in 2020. China has skirted American sanction measures to do business with Iran. This includes Iran’s lucrative and heavily sanctioned oil trade, which takes place under the radar.
The European Union in 2019 conducted $4.7 billion in trade with Iran, according to the report. That number dropped to $4.3 billion in 2020. Europe remains committed to trade with Iran, even in the face of U.S. sanctions, and has worked to facilitate America’s return to the nuclear accord, which it views as advantageous to this business relationship.
Behnam Ben Taleblu, an Iran expert at the Foundation for Defense of Democracies, said the figures “put more meat on the bone of the macroeconomic markers of success of the Trump administration’s maximum pressure policy against Iran.”
“Put simply,” he said, “maximum pressure was working, and reversing course will only have the opposite effect. These figures also serve as one footnote to support the larger claim that if economic pressure was enforced and compounded, the question of negotiating from a position of strength with the Islamic Republic of Iran would be a matter of when, not if.”