TEHRAN, Aug 7, (Agencies): US President Donald Trump warned the world against doing business with Iran on Tuesday as he hailed the “most biting sanctions ever imposed”, triggering a mix of anger, fear and defiance in Tehran. “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,” Trump wrote on Twitter. “Anyone doing business with Iran will not be doing business with the United States. I am asking for World Peace, nothing less.”
Within hours of the sanctions taking effect, German carmaker Daimler said it was halting its business activities in Iran. Trump’s May withdrawal from a landmark 2015 nuclear agreement had already spooked investors and triggered a run on the Iranian rial long before nuclear-related sanctions went back into force.
“I feel like my life is being destroyed. Sanctions are already badly affecting people’s lives. I can’t afford to buy food, pay the rent,” said one construction worker on the streets of the capital.
The sanctions reimposed on Tuesday, which target access to US banknotes and key industries such as cars and carpets, were unlikely to cause immediate economic turmoil. Iran’s markets were actually relatively buoyant, with the rial strengthening by 20 percent since Sunday after the government relaxed foreign exchange rules and allowed unlimited, tax-free gold and currency imports.
But the second tranche, which kicks in on Nov 5 and targets Iran’s vital oil sector, could be far more damaging — even if several key customers such as China, India and Turkey have refused to significantly cut their purchases. In a statement on Monday before the sanctions were reimposed, Trump said he was “open to reaching a more comprehensive deal” with Iran, which covered “its ballistic missile programme and its support for terrorism.” But his Iranian counterpart Hassan Rouhani dismissed the idea of talks while crippling sanctions were in effect.
“They want to launch psychological warfare against the Iranian nation,” Rouhani told state television. “Negotiations with sanctions doesn’t make sense.” European governments are infuriated by Trump’s strategy, which has prompted many of their large firms to leave Iran for fear of US penalties. Daimler said it had “suspended our already limited activities in Iran in accordance with the applicable sanctions”. British Foreign Office Minister Alastair Burt said that the “Americans have really not got this right”.
The nuclear deal was important “not only to the region’s security but the world’s security,” he told the BBC. Iranian Foreign Minister Mohammad Javad Zarif told reporters the global reaction to Trump’s move showed that the US was diplomatically “isolated”. Iran ally Syria branded Washington’s move “illegal under international law”.
“The US administration’s policies have a proclivity for hegemony and arrogance,” said a foreign ministry official, quoted by state news agency SANA. Russia’s foreign ministry said it was “deeply disappointed” by the return of sanctions, adding that it would do “everything necessary” to save the 2015 nuclear deal. Zarif on Tuesday welcomed to Tehran his North Korean counterpart, Ri Yong Ho, as Pyongyang also faces US pressure to scrap its nuclear capabilities. Most Iranians see US hostility as a basic fact of life, so their frustration is largely directed at their own leaders for not handling the situation better.
“Prices are rising again, but the reason is government corruption, not US sanctions,” said Ali, a 35-year-old decorator in Tehran. Long-running discontent over high prices, unemployment, water shortages and the lack of political reform has sparked numerous protests over the past week, though verifiable information is scarce due to heavy reporting restrictions. Many hope and believe that Iran’s leaders will “drink the poison cup” and negotiate with the US eventually.
There have been rumours that Trump and Rouhani could meet in New York in September on the sidelines of the UN General Assembly — though Rouhani reportedly rejected US overtures for a meeting at last year’s event. Two countries that have welcomed the tough new US policy are Iran’s regional rivals, Israel and Saudi Arabia. Israeli Prime Minister Benjamin Netanyahu hailed the renewed sanctions as “an important moment for Israel, for the US, for the region, for the whole world.” Iran’s currency has lost around half its value since Trump announced the US would withdraw from the nuclear pact. But the last two days have seen the rial’s value surge by a fifth following the arrest of the central bank’s currency chief and new plans being announced. The new rules mean foreign exchange bureaus will reopen after a disastrous attempt to fix the value of the rial in April backfired spectacularly, with corrupt traders making a fortune out of a mushrooming black market.
German automaker Daimler on Tuesday said it was halting its business activities in Iran after the United States re-imposed sanctions on Tehran. “We have suspended our already limited activities in Iran in accordance with the applicable sanctions,” a spokeswoman said in a statement sent to AFP, adding that Daimler was closely monitoring political developments.
The move brings a sudden end to Daimler’s expansion plans in Iran, where it was teaming up with two local firms to assemble Mercedes-Benz trucks. It comes as a first round of renewed US sanctions on Iran came into effect after Trump unilaterally pulled out of the Iran nuclear deal.
The first sanctions targets access to US banknotes and key industries such as cars and carpets. A second tranche coming into effect on Nov 5 is expected to be even more damaging, covering Iran’s vital oil sector.
The European Union, which still adheres to the landmark 2015 nuclear pact, has promised to take steps to protect EU firms’ dealings with Iran, but the uncertainty has already prompted many businesses to pull out of the country. French carmaker Renault, which does not sell cars in the US, has said it will remain in Iran despite the sanctions. But French oil group Total and carmaker PSA have already indicated they are likely to withdraw from Iran.
Daimler had signed a letter of intent in 2016 to manufacture and sell Mercedes trucks in Iran in a joint venture with Iran Khodro Diesel (IKD) and the Mammut Group, in its first big step to return to the country after years of sanctions over its nuclear programme. In its statement, Daimler stressed that it had not yet started making or selling any trucks in Iran, nor was it selling any passenger cars there. “We continue to monitor closely the political developments, particularly with regard to the future of the nuclear agreement,” Daimler added.
Meanwhile, Iraq does not agree with US sanctions against Iran but will abide by them to protect its own interests, Prime Minister Haider al-Abadi said on Tuesday. “As a matter of principle we are against sanctions in the region.
Blockade and sanctions destroy societies and do not weaken regimes,” he said at a news conference. “We consider them (sanctions on Iran) a strategic mistake and incorrect but we will abide by them to protect the interests of our people. We will not interact with them or support them but we will abide by them,” he added. Russia on Tuesday said it was “deeply disappointed” by Trump’s decision to reimpose unilateral sanctions on Iran. “We are deeply disappointed by US steps to reimpose its national sanctions against Iran,” the Russian foreign ministry said in a statement.
The ministry said it will do “everything necessary” to save the historic 2015 Iran nuclear deal and protect its shared economic interests with Tehran. “This is a clear example of Washington violating UN Resolution 2231 (on the Iran deal) and international law,” the statement said. Moscow said the multi-party nuclear agreement Trump abandoned in May has “shown its effectiveness”.
It called on the international community “not to allow such significant achievements in multilateral diplomacy to be sacrificed in the name of American aspirations to settle political scores with Iran.” “As long-term experience has shown, it will not be possible to gain concessions from Iran using pressure,” the statement said. The US re-imposed a wave of tough, unilateral sanctions against Iran on Tuesday, bringing back into effect harsh penalties lifted by the deal. The European Union’s foreign policy chief encouraged companies to do more business with Iran despite new US sanctions, saying Tehran had upheld its commitments under the deal to limit its nuclear program. Federica Mogherini told reporters Tuesday during her trip to Wellington, New Zealand, that it’s up to Europeans to decide whom they want to trade with.
“We are doing our best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran because we believe this is in the security interests of not only our region, but also of the world,” she said. “If there is one piece of international agreements on nuclear non-proliferation that is delivering, it has to be maintained.”