Of Sanctions and Trade Wars

The United States has launched an economic war against Iran, which has no other choice but to take necessary countermeasures. The world is watching with great concern, and nations have every reason to worry, because Washington is resolved to pursue unilateralism.

News ID: 445351

Date: 11 June 2019 - 09:43

RNA - In the world where we live, all countries are interdependent. At stake are the global security and economy and everyone in it. There will be no winners in a trade or sanction war, and no one can remain unaffected. In fact, Iran is not the only target. Since 2017, the United States has initiated trade wars with China and additional tariffs and other measures against its major trading partners. It has also imposed illegal sanctions on countries like Iraq, Syria and Libya.

Claiming "America First," the United States has also adopted a series of unilateral and protectionist measures, wielding a "big stick" of tariffs to force its own will onto China and others. This is sheer trade bullying and does harm to the world. It undermines the authority of the multilateral trading system, the WTO that has been propagated by the US-led West itself.

The United States, by launching unilateral investigations according to its domestic law and imposing additional tariffs on Chinese products, has violated WTO rules, such as most-favored-nation treatment and tariff binding. By imposing illegal and unjustified sanctions on Iran, it has also violated the fundamental norms of international law.

This hurts the interests of many countries, weakens the authority of the WTO, and the UN and its dispute settlement mechanism, and jeopardizes the multilateral trading system and the international political order. It poses a serious threat to global growth and security. The global economy is yet to fully recover from the devastating financial crisis in 2008.

However, some people may have already forgotten the pain. Higher tariffs have caused disorder of international trade, impending global recovery and hurting businesses and well-being of the people. As a result, the global economy is facing a rising risk of recession. The same could be said about America’s wars in the region. The region is yet to recover from the illegal wars on Afghanistan, Iraq, Syria, Libya and Yemen.

In its Global Economic Prospects released in January 2019, the World Bank revised its forecast of global growth further down to 2.9 percent, citing continuous trade frictions as a major downward risk. The IMF, in its World Economic Outlook report published in April, marked down its projection of world economic growth for 2019 to 3.3 percent from the 2018 estimate of 3.6 percent, suggesting that economic and trade friction could further depress the global economy and weaken already anemic investment.

The oil ban on Iran disrupts global energy and supply chains. Iran is a key oil supplier with key links in global energy and supply chains. Given the large volume of oil and components from the country and other end-products exported to the world markets, the US oil ban will hurt all multinationals – not least US ones – that work with Iran and other countries.

The oil ban measures drive up the costs of supply chains and undermine their stability and security. Some countries and businesses are forced to relocate sources of supply at the expense of optimal global allocation of resources. What is even more worrying is that the US measures are putting multilateralism under threat.

In fact, slapping sanctions and tariffs and abusing state power to crush companies and undermine countries look quite familiar, reminding us of other US moves in recent years: The withdrawal from UNESCO and the UN Human Rights Council, the Paris Agreement on climate change and the Iran nuclear deal known as the JCPOA. Being challenged is the rules-based international order and the authority of the UN.

Multilateralism and mutually-beneficial cooperation are in the interests of all countries. Unilateralism and protectionism, on the other hand, go against the trend of history and will lead to nowhere. Facing bullying, countries cannot sit by in silence; after all, anyone could be the next victim.

According to Fars News Agancy, the US is entirely responsible for the severe setback in security in the Persian Gulf and the broader Middle East. This hasn’t made America great again. On the contrary, it has hurt regional security, US economy, and global energy markets. Iran’s position is clear: Iran does not want a war, but it is not afraid of one; if the war reaches its doorstep, it will fight to the end.

Concerning differences and frictions on the region and security front, Iran has already stuck a nuclear deal in what was to be a win-win agreement. Now after increasing US unilateralism that saw an abrogation of the nuclear deal by Washington and after EU's inaction to provide Tehran with the promised merits, the deal has changed nature into a zero-sum game, leaving Iran no other option but to stop a trend that will eventually end up in its loss. Hence, Tehran is warning the EU and the US change course and revise their tricky strategy or wait for Iran's reciprocal move. In essence, this is not Tehran that should sit to the negotiating table with Washington; rather this is the US that should stop unilateralism and get back to the multilaterally and internationally endorsed nuclear deal and remove the sanctions reimposed on Iran.

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