U.S. sanctions of Russia/Iran are leaking like a sieve

If you thought Europe was onboard with Washington's efforts to isolate Russia, think again.

Despite ongoing sanctions, Russia/western nation trade volumes continue to grow, demonstrated by the 2018 import growth of western goods, Russia's trade officials reported.
What’s more, according to recent statistics published by the Association of Commercial Seaports of Russia, container goods imports to Russian ports on the Baltic Sea in 2018 exceeded exports — the first time that’s happened in almost five years.

Barclay's predicted that Europe would trigger its 1996 Blocking Resolution to protect its companies from U.S. legal action for doing business with Russia.

If you thought that Europe's and Asia's defiance against the U.S. sanctions of Russia was significant, just wait for the global defiance of our sanctions of Iran.
There will be so many negative consequences for the U.S. that they must be put into a list.

1) New U.S. sanctions will not break Iran because Iran never managed normal trade relations with the West anyway.

The nuclear deal hasn’t delivered more than a trickle of Western investment — and even that is poised to dry up, after US President Donald Trump pulled out of the agreement and said he’ll re-impose sanctions.
To develop its $430bn economy, Iran is being forced to rely on political allies in the east. Trade with China has more than doubled since 2006, to $28bn. The biggest chunk of Iran’s oil exports go to China, about $11bn a year at current prices.

Iran's trade with China is absolutely crucial. Which leads us to point #2.

2) China has no intention of respecting these new sanctions.

While the United States is now urging foreign companies to wind down their operations in Iran, China appears to be doing the opposite. Thursday’s launch of a freight train connection was only the latest measure that Beijing has taken to intensify trade relations with Iran, and there seem to be no plans so far to give in to U.S. demands.
During a media briefing Wednesday, Chinese Foreign Ministry spokesman Geng Shuang said that Iran and China would “maintain normal economic ties and trade.”
...That’s how China has to some extent managed to circumvent U.S. sanctions in the past and would likely be able replicate this time. Rather than trading in U.S. dollars, China and Europe could use their own currencies, for example. There are also plans to create separate funds and banks the United States would be unable to punish for having ties to Iran.
“The more the United States (overreaches), the more other countries are going to look for ways to set up longstanding systems that U.S. sanctions would no longer be able to affect,” said Esfandiary. In other words: Trump’s Iran decision could weaken U.S. sanctions threats in the long run.

China is too big of an economic powerhouse for the U.S. to intimidate them. China has long defied our sanctions of Russia, and they will do the same with Iran.
China is not alone.

3) India has no intention of respecting our new Iran sanctions.

India could revive a rupee-rial payment arrangement with Iran to bail out exporters from the heat of US sanctions that have cast a shadow over any plan to further boost trade with the Islamic nation, exports to which had reversed a three-year slide in 2017-18, trade sources told FE on Thursday. Around 2011-12, a rupee-rial mechanism was put in place where up to 45% of India’s purchases of Iranian crude could be effected in rupees in exchange for items like rice, wheat and medicines that were not sanctioned by the UN.
...India’s oil purchases from Iran, worth around $9 billion, accounted for over 80% of its total imports from the Persian Gulf nation in 2017-18. According to commerce secretary Rita Teaotia, the US move is unlikely to cause any major shift in India’s trade with Iran, as the country had shipped out goods to the Islamic nation earlier even when sanctions were on.

India, like China, has long defied our sanctions of Russia, and they will do the same with Iran.
The difference now is how opposed Europe is to these Iran sanctions.
Russia, China, and Europe all have "shared disapproval" of Washington's move.

4) Europe is prepared for open and coordinated defiance of our sanctions.

Europe is prepared to introduce measures to nullify the effect of Donald Trump imposing sanctions on any non-US firm that continues to do business with Iran, the French government has said.
“We have to work among ourselves in Europe to defend our European economic sovereignty,” Le Maire said, adding that Europe could use the same instruments as the US to defend its interests. Speaking on Europe 1 he added: “Do we want to be a vassal that obeys and jumps to attention?”

He added: “The second avenue is looking at Europe’s financial independence – what can we do to give Europe more financial tools allowing it to be independent from the United States?” One proposal is to set up a purely European finance house to oversee euro-denominated transactions with Iran.

He also proposed a European agency capable of following the activities of foreign companies. Le Maire said he would meet with German and British finance ministers at the end of the month to discuss these proposals.

While these measures are for a specific situation, they will have long-term effects.
Quite simply, our sanctions will permanently damage global dollar hegemony.

5) This is another of a thousand tiny cuts that are killing the petrodollar.

China is positioned to be a chief beneficiary of the U.S. decision to withdraw from the Iran nuclear deal as it would give China leverage to demand oil imports be priced in yuan, several currency experts said on Thursday.
...The People’s Republic stands to benefit if it can use its leverage as the world’s largest importer of crude by insisting that its oil purchases from Iran be priced in yuan.
Oil is priced and traded in U.S. dollars because of the dominance of the dollar-denominated Brent and West Texas Intermediate benchmarks. Pricing imports in yuan would therefore spare China the cost of exchanging dollars, and would increase the use of the renminbi in global financial trade, which could ultimately hurt the dollar’s international clout.

What this trend is leading to is an end to the American Empire.
We've been losing economic influence for a long time, but now we're losing diplomatic influence.
Eventually military influence will end as well.

34 users have voted.


13 users have voted.
TheOtherMaven's picture

A petard is a kind of bomb. To get "hoist" by one is to get blown sky-high.

4 users have voted.

There is no justice. There can be no peace.

mimi's picture

I think that is the one thing the Americans couldn't stand and would do everything to keep that military influence.

6 users have voted.

this book

8 users have voted.

@gjohnsit I could recommend in this vein.thiswould get you started, though it's a little esoteric.

4 users have voted.

@mimi Our military expenditures are absurd and put a terrible strain on our economy, not to mention sucking talent away from more useful pursuits. However, I don't think our loss of military influence will be a gentle fading away. My guess is that there will be death throes which will be very nasty for very many people.

13 users have voted.
mimi's picture

@Roy Blakeley @Roy Blakeley (updated, always get in trouble with the double negatives,corrected a sentence)
I am so confused...

reading through the responses here:

I guess my sentence that I don't believe that the Americans will lose their military influence was meant to be interpreted in the sense that the Americans couldn't lose a military battle, but could lose a war against their own American oligarchs destroying their own social fabric and with it its own people.

I am sorry, I read gjohnsit's article late at night and have already lots of problems to hold on to reading up. I thank you for the recommendation to read the book titles posted.

Linda Wood said above that the "neocon fascist elements" in the America's political is either
treasonous or bat-shit crazy. Which made me look up where the expression bat-shit crazy came from (heh, non-native English speaker here):

A person who is batshit crazy is certifiably nuts. The phrase has origins in the old fashioned term "bats in the belfry." Old churches had a structure at the top called a belfry, which housed the bells. Bats are extremely sensitive to sound and would never inhabit a belfry of an active church where the bell was rung frequently. Occasionally, when a church was abandoned and many years passed without the bell being rung, bats would eventually come and inhabit the belfry. So, when somebody said that an individual had "bats in the belfry" it meant that there was "nothing going on upstairs" (as in that person's brain). To be BATSHIT CRAZY is to take this even a step further. A person who is batshit crazy is so nuts that not only is their belfry full of bats, but so many bats have been there for so long that the belfry is coated in batshit. Hence, the craziest of crazy people are BATSHIT CRAZY.

Which somewhat tells me that the bells to remind the Americans of truthful ethics and morals haven't rung frequently (if at all) for a long, long time. So the bats in the belfry of the American churches minds made them rather batshit crazy than treasonous. I would say. But what do I know.
All just some rumors from my guts. But you know, batshit crazy folks can produce great musicians and art, and that's lovable.
PS: and if I again made some sentence that doesn't make sense to you, it's because I have not read all the other great diaries and comments yet. I learn one comment and diary at a time and you folks write too much !!!!!
arghh,I meant to post this smiley, sorry.
Give rose

9 users have voted.
dervish's picture

and then we can eventually have peace and prosperity once more, when the shock wears off.

24 users have voted.

"Obama promised transparency, but Assange is the one who brought it."

@dervish has been dispensed with already, but the Illites need the coming kick in the head to snap out of their delusions.

12 users have voted.
QMS's picture

the petro dollar has become the war dollar. It is no surprise the rest of the world would rather deal in a more peaceful currency.

23 users have voted.

Listen to your higher mind.

Pricknick's picture

that I'm not the only american feeling that this is a good thing.
This country is well on the way to an ugly period. Hopefully the end of the thought of "Exceptionalism" is upon us.
Nice post gjohn.

26 users have voted.

Regardless of the path in life I chose, I realize it's always forward, never straight.

Bollox Ref's picture

for the U.S., would do the rest of the globe a power of good.

21 users have voted.

from a reasonably stable genius.

CB's picture

China and Russia positioned to profit. Russia already profiting due to higher oil prices. Maybe The Donald should read Trump: The Art of the Deal.

China ready to replace Total in Iran – report

Chinese energy giant CNPC is willing to buy French firm Total’s stake in the Iranian South Pars gas project should the latter decide to quit because of US sanctions against Tehran, Reuters reports.

“The possibility of Total’s pullout is quite high now, and in that scenario CNPC will be ready to take it over fully,” the news agency quotes its industry source as saying.

“CNPC foresaw a high probability of a re-imposition of US sanctions,” another source said.

The South Pars field is the world’s biggest natural gas reserves ever found in one place. Total has a 50.1 percent stake in the project that develops phase 11 of the South Pars, while China has 30 percent with the remaining shares belonging to Iranian national oil company subsidiary PetroPars.

At the current gas prices, the entire reserves of the South Pars can be estimated at around $2.9 trillion. Iran shares the field with Qatar. Total signed a deal with Iran in July 2017 to develop phase 11 of the gas field with an initial investment of $1 billion. The French company was the first Western firm to invest into Iran’s energy sector after the 2015 nuclear deal.

Ten O’Clock to Tehran: China Launches New Rail Link with Iran as US Severs Ties

Beijing has officially opened its new train route to Iran, as the US urges its companies to wind down their operations with the Islamic Republic.

As US President Donald Trump hardens his confrontational attitude to Tehran, tearing up the 2015 nuclear deal and calling for a new sanctions regime, China is more than ready to grab the opportunity for trade by opening a new international railroad connecting Tehran and Bayannur, a city in China's Inner Mongolia region.
According to the Washington Post, Iran sells more to China than to any other country and celebrated a 25 percent increase in exports there last year. The value of Chinese exports to Iran also increased by more than 21 percent last year, according to Islamic Republic of Iran Customs Administration's statistics.

Boeing and Airbus will miss out on a combined $39 billion payday because of Trump's Iran deal decision
In 2016, two companies signed deals worth a combined $39 billion with various Iranian airlines to help update the country's aging fleet.

Treasury Secretary Steven Mnuchin told reporters Wednesday that the Boeing and Airbus deals "will be revoked."

Russia to sell Sukhoi SuperJet-100 airliners to Iran

Deliveries of Russian SSJ-100 (Sukhoi SuperJet-100) airliners to the Islamic Republic of Iran have been discussed between Moscow and Tehran, Energy Minister Alexander Novak told Rossiya-24 TV channel.

“We talked about the possibility of Sukhoi SuperJet-100 purchases by our Iranian partners and outlined a plan of how this can be put it into practice,” he said.

The two countries have been also negotiating local production of the SSJ 100 airliner to replace Iran’s ageing fleet on regional routes.

Iran has a shortage of modern aircraft and local airlines are hoping that the Russian planes could bolster the country’s regional aviation industry.

Sukhoi SuperJet-100 is Russia’s newest twin-engine regional passenger aircraft, which began operating commercially in 2011. More than 60 aircraft are in service with airlines in Laos, Mexico, and Russia.

16 users have voted.

online paper (sorry can't remember name right now) you'd have seen, in 2012, a statement from their treasury that their plan was to get rid of dependency on the US dollar by 2018.
That's why we've seen China (and others who realize US dollar hegemomy makes the war machine possible) making deal upon deal on their own currencies.
With the Iran sanctions sure to help China (etc) reach its 2012 goal, added to our Middle East Suicide one can be forgiven for wondering just how many moles from our enemies are in policy positions in the US. Or maybe they're just that stupid and deluded.

15 users have voted.

@jim p

it has been clear for some time that the neocon fascist element in our political class is either insane or treasonous. They're not stupid. They're arguably the most powerful people on earth. They're at least among the most powerful. So it has nothing to do with stupidity. They're either treasonous or they're bat-shit crazy. And it's hard to believe that so many wealthy lunatics could manage to fill so many think tanks. So logic would tell me they are traitors.

12 users have voted.
QMS's picture

@jim p Indeed. Methinks the Israelis have seduced the US warmongers into beliefs that run contrary to their economic empowerment.

12 users have voted.

Listen to your higher mind.

earthling1's picture

a re-birth of the "Silk Road". Only a more modern 21st century version of rail, highway, and air travel, connecting all continents except N. and S. America.
From the eariest days of our Republic we isolated ourselves from the rest of the world.
Now, the rest of the world will isolate us.

11 users have voted.