Ironically, designating the IRGC a terrorist group will not have serious economic consequences for those who run the military force. In fact the IRGC has benefited (yes, benefited) from US sanctions over the years, due to its massive share in the Iranian economy. Economic sanctions on Iran have created a dark financial ecosystem where state and private actors engage in non-transparent trade and financial dealings which allow them to circumvent the sanctions. That has created a breeding ground for massive corruption in the country; the IRGC and its collaborators have been key benefactors.
Economic sanctions have been hurting ordinary Iranians more than any military or government entity. Just in recent weeks, devastating floods across Iran hit hundreds of villages and towns, killed at least 70 people, destroyed thousands of homes, farms, livestock, schools, roads, and bridges, and cost millions of dollars in damages that will take years to recover. All during an economic crisis in the country that has been enhanced by US sanctions. These same sanctions have limited Iran’s ability to receive financial aid from abroad in a time of crisis. Trump administration officials keep repeating that they support “the Iranian people” — but their actions suggest the opposite.
U.S. designation of a branch of Iran’s military as terrorists is an obvious gift to Iranian hard-liners. It is the latest in a series of gifts that Trump has handed to those elements in the Iranian regime most hostile to the U.S., and each time that the U.S. delivers one of these gifts the more difficult things become for advocates of political and social reform inside Iran. Iranian proponents of engagement with the West have been repeatedly undermined by this administration, and every time that happens they have less credibility and support at home. Just as Trump gives hard-liners here in the U.S. whatever they want, he is effectively handing greater influence and power inside Iran to the hard-liners there. The two camps thrive and feed off of one another’s hostility, and as U.S. policy towards Iran becomes more aggressive the better things are politically for the worst members of the regime. There is a tendency to criticize hawkish policies toward Iran for being “counterproductive,” because they always backfire and harm U.S. interests, but Iran hawks desire this outcome and seek it at every turn.
Iran hawks defend Trump’s latest bad decision as “recognizing reality,” which is how they have taken to defending many of his worst decisions. Every time that Trump “recognizes reality,” it involves him doing something unprecedented and unwise. The “reality” that he recognizes is always a controversial and contested claim embraced by hard-liners in the U.S. and Israel, and each decision is an attempt to change political realities to suit those hard-liners’ preferences. The lame argument that Trump is merely “recognizing” things that everyone knows to be true is a dodge and proof that the advocates for these positions don’t have much to support their case. Trump likes to boast that he is doing things that none of his predecessors was willing to do, but that should tell us something about how reckless and ill-considered those things are. If even George W. Bush was cautious enough not to designate the IRGC as a terrorist group, it has to be a phenomenally dangerous thing to do. Now that Trump has done it, he owns the deterioration in relations with Iran that is certain to follow.