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Paying the Price of Trump’s Iran Obsession

Trump's Iran policy has been destructive all along, but now it is threatening to damage the U.S. and global economy for no good reason.
DC: Donald Trump And Ted Cruz Join Capitol Hill Rally Against Iran Deal

Keith Johnson reports on the Trump administration’s destructive push to strangle Iran’s oil exports:

But it’s not clear that Iran’s biggest customers will comply. Between them, China, India, and Turkey account for about half of Iran’s oil exports. And the State Department official acknowledged that talks have yet to begin with any of those countries regarding curtailing sales.

“I really don’t see how this is feasible from either a political or market perspective,” said Richard Nephew, who helped negotiate the original oil sanctions on Iran and who is now at Columbia University’s Center on Global Energy Policy.

If the administration follows through on its threats, it will be picking fights with several of the world’s largest economic powers and driving up energy prices for the entire world. It will be doing this for the sake of its increasingly unhinged hostility towards Iran that the rest of the world doesn’t understand and doesn’t share. Most Americans probably couldn’t care less about Trump’s Iran policy the rest of the time, but they will resent it when that policy leads to higher prices for gas and other goods. Trump’s other misbegotten moves on trade are already driving up costs and hurting U.S. businesses, and this would compound those problems.

India and China have no incentive to comply with a demand that interferes with and threatens their own economic interests, and they have strong incentives to continue doing business with Iran. Neither will respond well to being told what to do by Washington. Imposing sanctions on China for refusing to go along with this bullying could have serious, negative repercussions for the U.S.:

“They’re going to go after the Central Bank of China just before the midterms?” said Daniel Fried, a top White House and State Department official in the administration of President George W. Bush. “The next day’s headline will be: ‘Dow Drops 5,000 Points.’”

U.S. allies that import significant amounts of oil from Iran will also resent being told how to conduct their trade with a gun pointed at their heads, and straining relations with European and Asian allies at the same time will have unforeseen costs for the U.S. on other issues. The Trump administration is proposing to do something that will drive up prices for American consumers, likely cause the market to crash, and poison relations with our major trading partners, and all so that they can indulge their preoccupation with inflicting pain on Iran. Trump’s Iran policy has been destructive all along, but now it is threatening to damage the U.S. and global economy for no good reason.

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