When the United States withdrew from the Iran nuclear accord last May, one of the hopes of the Trump administration was that it would cripple Iran’s trade. As trade collapsed and foreign currency reserves dried up, Iran would come under more pressure, unable to raise revenues and import goods and services.
Only, the rest of the world wasn’t onboard with America’s withdrawal from the Iran pact which, according to most international observers, Iran has so far upheld. And now, France, Germany, and the United Kingdom have teamed up to establish a trade channel to Iran.
The Instrument in Support of Trade Exchanges (INSTEX) was unveiled in Bucharest, Romania and will be used to channel food, medicine, and medical equipment to Iran. It’s possible that the INSTEX will be expanded to include other goods in the future. Since the U.S. withdrew from the nuclear deal, Iran’s economy has suffered severe shortages of essential goods, including medical supplies.
European officials state that INSTEX has been set up to ensure that Iran remains committed to the accord. European leaders fear that Iran could withdraw and begin enriching uranium.
President Donald Trump has warned foreign countries of doing business with Iran. Apparently, the United States could go as far as closing off access to American financial markets and American businesses. The Trump administration would risk economic and financial turmoil, however, if it aggressively pursued action against the European Union.
It’s not all bad news for the Trump administration and its stance on Iran, however. China has dramatically reduced trade with Iran and so far seems to be following American sanctions. With the U.S. and China locked in a trade war that is damaging China’s economy, Beijing may be unwilling to upset Washington further.
State-side, many American intelligence chiefs have come on record, claiming that Iran is adhering to the nuclear agreement and downplaying Iran’s threat to the global community. In response, Trump blasted the officials as “extremely passive and naive.”