With Trump’s Iran hammer about to fall, who may seek a waiver?

The last time the U.S. imposed similar sanctions, during the Obama administration, China, Japan, South Korea, Turkey, Taiwan and India won exemptions. President Donald Trump’s administration announced that it would reinstate sanctions on Tehran after it withdrew from the Iran deal. Iran has responded with military threats, but backed it up with very little real action. Iran’s economy is tanking for a number of reasons. The sanctions from Trump in August, and again in November, could seriously rock the Islamic Republic, which is already seeing massive protests. Iran has its back against a wall and faces economic or military defeat by the US or a humiliating summit with Trump. An expert told Business Insider that Iran could negotiate with the US through Russia to save face. When it comes to buying Iranian oil, Donald Trump has laid down the law for the world: Don’t do it. This time around, Secretary of State Michael Pompeo says America expects all oil purchases from Iran to “go to zero’’ but also that the administration will “consider waivers where appropriate.’’

President Donald Trump’s administration announced that it would reinstate sanctions Tehran after it withdrew from the Iran deal – and the Islamic Republic has made no shortage of vitriolic threats about what it might do in response. At the stroke of midnight on Tuesday, the US will sanction Iran’s central bank, sending a clear message to its European allies: Do business with the US, or do it with Iran, but not both. In November, the US will follow up with another round of sanctions targeting Iran’s lifeblood: its oil exports. “It’s pretty clear the Iranians are suffering a fair degree of anger over the economy,” Ambassador Dennis Ross, who has worked on Middle East policy in four US administrations, told reporters on a call set up by the Washington Institute for Near East Policy. In the past week, the price of toothpaste has risen three times,” said Ross. As a result, Iran has seen wave after wave of protests from both rich and poor citizens, which it often suppresses with violence. Ross said it was unusual to have bazaar vendors, truckers, and conservative towns protesting and beaten back by riot police, and that the recent protests were “noteworthy.” But “all of this unhappiness, all of the economic difficulties related to the devaluation, has taken place before the sanctions had been reimposed,” said Ross. Trump’s election and mounting anticipation that sanctions would snap back have had some effect on Iran’s economy, but “it’s not the root cause,” said Ross.

India, the second-biggest importer of Iranian oil is cutting back –- while signaling that it won’t shut down the trade completely. And India’s government isn’t just buying crude from Iran. The biggest oil importer from Iran, China is a wild card in Trump’s calculations. It’s a competitor, not amenable to the kind of pressures that can be applied to allies. Beijing has rejected the U.S. request to stop buying Iranian crude, Chinese officials say, though it’s agreed not to ramp up purchases. Cutting the burgeoning commercial ties between China and Iran is probably a task beyond American power. In fact, as European companies quit the Islamic Republic under pressure from Trump, China sees a business opportunity there. Still, Trump is engaged in a broader tussle with China over trade, slapping tariffs on an ever-larger chunk of Chinese exports. Iran sanctions are one possible area where Beijing could offer him a concession. Instead, deep corruption, talent mismanagement, years of isolation from international business standards, the Islamic Revolutionary Guard Corps’ massive role in the economy, and total lack of transparency have proven inhospitable to investment, said Ross.

America’s two closest allies in Asia are ahead of the curve: Both scaled back their purchases of Iranian crude to zero recently, but that may not last. The South Koreans have officially requested a waiver, and Japanese refiners have pressed their government to do the same. The U.S. needs both countries to help sustain international sanctions on North Korea over Pyongyang’s nuclear program, arguably the administration’s top foreign policy issue. Any request for an exemption from Seoul or Tokyo won’t be easily dismissed. Like India, Turkey is in double defiance, insisting it won’t comply with oil sanctions that aren’t endorsed by the UN and won’t drop its plan to buy advanced missile systems from Russia, despite being a NATO member. U.S.-Turkey ties were tense over the country’s detention of an American pastor, who was finally freed this month. Turkey is also a central actor in the drama that upended the Middle East this month: the murder of Washington-based Saudi journalist Jamal Khashoggi. President Recep Tayyip Erdogan says he has intelligence about Saudi Arabia’s role in the killing. That could give him leverage with Trump, who’s keen to preserve his Saudi alliance.

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