By Jon Dougherty
(NationalSentinel) As President Donald Trump prepares once again to take on a regional bully, he is once more getting pushback from European ‘leaders’ who are not losing drones or incurring any other costs of doing business with Iran.
Following the Islamic republic’s downing of a $130-plus million RQ-4 Global Hawk surveillance drone in international waters last week, the president, who reportedly was ready to launch a counterstrike at Iranian radar and missile installations until he learned of how many people would be killed, seems prepared to impose radical new sanctions on the regime instead.
But, The Wall Street Journal reports, European leaders who have done virtually nothing to reign in Iranian terrorist activities and expansionism in the region except sign a worthless ‘nuclear’ agreement, are pressing Trump to back off:
In mounting its pressure campaign, the U.S. is seeking ultimately to drive the Islamic Republic’s oil exports to zero. It has more recently imposed sanctions on Iran’s industrial-metals sector and announced major sanctions on one of the country’s biggest petrochemical companies.
“We’ve done very massive sanctions. We’re increasing the sanctions now,” Mr. Trump told NBC over the weekend.
Iran had hoped to spook Mr. Trump and other nations into easing Washington’s financial and economic embargo that has shocked the nation’s economy, U.S. officials and analysts said.
Iranian leaders, those people said, are gambling Mr. Trump is so averse to a direct U.S. war with Iran that he will slow the pace of new sanctions, soften global enforcement and compromise on U.S. demands for a nuclear and security deal.
But Mr. Trump’s decision to raise economic pressure further suggests he believes he can use sanctions to bring Iran to the negotiating table on U.S. terms without triggering a conflict.
Among those pushing for restraint are some of the usual Euro-suspects: France’s President Emmanuel Macron and German Chancellor Angela Merkel, both of whom are expected to lobby POTUS Trump at the upcoming summit of leaders from Group of 20 nations in Japan to go easy on Iran because…well, because.
Bucking many of his senior advisers in canceling a military counterstrike, POTUS and Secretary of State Mike Pompeo signaled over the weekend they are going to be patient for the time being and give Iran an opportunity to talk.
“When the Iranian regime decides to forgo violence and meet our diplomacy with diplomacy, it knows how to reach us,” Pompeo said on Saturday, denying reports that the U.S. has used Oman to appeal for talks with Iran. “Until then, our diplomatic isolation and economic pressure campaign against the regime will intensify.”
Also, the WSJ noted, to underscore the fact that the Trump administration isn’t giving Iran much leeway, officials said that cyber attacks against an Iranian intelligence group’s computer systems were launched last week.
Mr. Trump and his aides haven’t elaborated on what additional sanctions would look like. One possible channel for ratcheting up the pressure would be to penalize banks, insurers, traders or any other companies outside Iran that are still helping the country, a move supporters say would stifle the remaining flows of cash keeping the country and regime on life support.
Also in the mix are sanctions against Iran’s Special Trade and Finance Instrument, the mirror company to Europe’s Instrument for Supporting Trade Exchanges, a special-purpose vehicle set up to try to circumvent U.S. sanctions, a person familiar with Treasury discussions said.
Other sanctions could target economic sectors not already hit such as consumer- or industrial-goods manufacturing, or entities that move money or products in and out of Iran, such as trading houses or shipping concerns.
Meanwhile, CNBC reports that Iran is already in a precarious position, economically, as new sanctions appear likely.
“We can safely say that Iran’s revenue from oil has been cut by at least two-thirds, so they are in a very dangerous economic position,” Cailin Birch, global economist at the Economist Intelligence Unit, told CNBC’s “Squawk Box Europe ” on Monday.
“They are right to kind of put on a strong face to get themselves out of this conflict, but they are not in a position to fight a war either,” Birch said.
Birch estimated that Iran had been exporting between 10 million to 15 million barrels per week in seaborne crude oil exports in the first quarter of the year. Now, this firm sees “nominal volumes” of 4 million to 5 million barrels per week, but half of that was just shuttled in domestic ports, Birch said.
The Europeans understandably worry about an escalation with Iran, but giving the regime a pass and continuing to do business as usual with it isn’t going to change the regime’s behavior. Only maximum economic and military pressure will accomplish that.
- Follow Jon Dougherty on Twitter at @JonDougherty10
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