Will sanctions suffocate trickle of Iran-US trade?
With the reimposition of US sanctions, the trickle of trade between Iran and the United States could vanish altogether.
Amid hopes among many Iranians that the 2015 nuclear deal would revive Iran’s economy after years of isolation, trade ties began to expand — including with the United States. For instance, according to data released by the US Census Bureau, with the removal of sanctions in 2016, Iranian exports to the United States — chiefly consisting of carpets, caviar and pistachios — increased over 700% from $10.7 million in 2015 to over $87.7 million in 2016. However, Iran’s exports to the United States in 2017 dropped again to some $63 million and remained relatively in the same range ($68 million) from January to November 2018, when US oil and banking sanctions against Iran were reimposed in the aftermath of President Donald Trump’s withdrawal from the nuclear deal.
Although tensions between the US and Iran have increased since Trump came to power, a closer look at the US Census data reveals that despite a relatively stable import rate from Iran since 2016, US exports to Iran — which had been sliding since the nuclear deal was implemented in 2016 — saw a turnaround last year, paradoxically after Trump withdrew from the nuclear deal. Indeed, US exports to Iran have witnessed a sudden spike since July 2018, coinciding with China’s decision to impose retaliatory import tariffs on US agricultural goods.
Esfandyar Batmanghelidj, the founder of Bourse & Bazaar, which tracks developments in Iran’s economy, told Al-Monitor, “The only reason that the 2018 export total is so high is that there is a surplus of soybeans in the American market due to the China-US trade war. Some of this surplus has been diverted for export to Iran, adding hundreds of millions of dollars to the export totals over the year.”
According to the Census data, US exports to Iran, which had dropped to less than $9.5 million in June 2018, increased to some $35.7 million in July before reaching a year-high of about $150 million in August. In the next three months leading to November 2018, some $190 million worth of more US goods were exported to Iran. Yet, Batmanghelidj added, “Ignoring the sale of soybeans, exports of medicine and medical devices are actually slightly lower than during the Obama era.”
