The US dollar governing international trade is waning. Its days are numbered.
8 August, 2018 by Finian Cunningham
The Trump administration re-imposed tough sanctions on Iran this week, but the move risks further isolating Washington, not Tehran, in the eyes of the world.
President Donald Trump issued a statement to accompany the sweeping sanctions reinstated by Washington. “The Iranian regime faces a choice,” he said. “Either change its threatening, destabilizing behavior and reintegrate with the global economy, or continue down a path of economic isolation.”
Ironically, the same words uttered by Trump could apply more so to the United States.
This increasingly unhinged US regime needs to back off its “threatening, destabilizing behavior” and begin to respect multilateral rules like other nations. Otherwise, the US and its unilateral bullying is leading to its “continuing down the path of economic isolation”.
Trump also warned this week that, “Anybody doing business with Iran won’t be doing business with the US”. Careful what you wish for Donald! That very warning over Iran could end up much worse for your country.
The American president is in danger of recklessly overplaying his hand. His truculent demands that the rest of the world join in US efforts to isolate Iran economically are likely to backfire badly.
In particular, Trump is reinforcing the historic direction underway by Russia, China and others to shift their international trading relations away from relying on the US dollar as reserve currency. Without that privileged status as reserve currency, the US dollar would tank, and so would the entire American economy, based as it is on endless, unaccountable printing of greenbacks.
Russia, China and India are understood to be not willing to comply with Washington’s high-handed demands that they cut business ties with Iran.
Both China and India – Iran’s biggest export markets for its oil industry – have said they are not going to defer to Trump’s sanctions.
The resistance to American diktat is inevitably leading to the rest of the world coming up with new financing mechanisms for conducting trade. That, in turn, is hastening the demise of the US dollar’s international status.
Even the European Union this week pushed back against Trump’s policy to unduly antagonize Iran by trashing the international nuclear accord.
“We are determined to protect European economic operators engaged in legitimate business with Iran,” said the EU’s foreign policy chief, Federica Mogherini, in a statement co-signed by the foreign ministers of Britain, France and Germany.
The 28-member EU is introducing a Blocking Statute which will afford legal protection to its commercial ties with Iran from so-called “secondary sanctions” planned by the Trump administration to hit nations continuing to do business with Tehran.
Washington’s sanctions reimposed this week are aimed at cutting off Iran’s ability to conduct international trade using US dollar payments. But if other nations hold firm to commercial ties with Iran, they will circumvent the American restrictions by necessarily using bilateral currency deals transacted with euro, renminbi, rupee or ruble.
This is a transition already underway due to several overlapping factors, including the growing strategic importance of Russia-China bilateral relations, China’s global economic vision of its One Belt One Road initiative, Eurasian economic integration, and the increasing importance of the BRICS (Brazil, Russia, India, China, South Africa) in shaping a multipolar world.
The BRICS represent some 40 per cent of the world economy, and the grouping is signing up new associate nations, such as Turkey and Iran.
That inevitably means the once mighty dominance of the US dollar governing international trade is waning. Its days are numbered. Trump’s bullying towards Iran, and towards others through unilateral wielding of sanctions, is only hastening the global direction of dropping the American dollar as the world reserve currency.
A nation’s currency is all about its ability to command respect or trust from other nations. Washington, under Trump, is fast squandering those values.
President Trump’s policy towards Iran has no legitimate foundation. It is a blatant attempt to destabilize that nation for regime change in contravention of international law and the UN Charter. The rest of the world can see through Washington’s vile mask and its pompous rhetoric. What they see is a thuggish regime that selfishly and arbitrarily makes up its own rules as it goes along.
American power is as unscrupulous as it is riven with hypocrisy. Accusing Iran of “malign behavior” in the Middle East makes Washington sound ridiculous given its record in recent years of destroying whole nations and millions of innocent lives from illegal wars. As well as sponsoring terrorist jihadists to do its dirty work.
Trump’s walking away from the UN-backed international nuclear accord with Iran back in May, which has paved the way for the reimposition of US sanctions, is typical of Washington’s repudiation of multilateral norms for its own unilateral gratification. All signatories to the 2015 nuclear accord, including the EU, Russia and China, have expressed their support for the deal.
UN monitors have confirmed in nearly a dozen reports that Iran has complied fully with the terms of the agreement to restrict its development of nuclear weapons. Honoring its side of the bargain, Iran is fully entitled to sanctions relief mandated by the nuclear accord.
American dishonoring of the deal is solely based on its baseless and pejorative claims alleging Iranian “malign activity”. This is the same faulty American propagandistic mentality that accuses Russia of “election meddling” or China of “military expansionism”.
But what’s even more contemptible is the utter lack of principle even in the Trump administration’s own flawed claims about Iran. While denouncing Iran as an international pariah, Trump has also incongruously offered to negotiate with the Iranian leadership.
Speaking just as the renewed sanctions were coming into force, Trump’s national security advisor John Bolton, told Fox News: “They [Iran’s leaders] could take up the president’s offer to negotiate with them, to give up their ballistic missile and nuclear weapons programs fully and really verifiably.”
Where’s the principle in Trump’s logic? If the “Iranian regime” is the “world biggest sponsor of terrorism”, as the Trump administration dubiously claims, thereby justifying its abrogation of the nuclear accord, then how is it ethically acceptable to offer talks to such a supposed pariah?
Clearly, the Trump administration has no principled objection to talking with the Iranians. Just like it has no principled objection to the nuclear agreement itself. Bolton’s assertion that Iran must “give up its ballistic missile program” is an add-on demand that was never covered by the original nuclear negotiations. Bolton’s second claim that Iran “must give up its nuclear weapons program fully and verifiably” is simply a baseless assertion, that is, American propaganda.
Every other party to the nuclear accord, and the competent UN technical monitors, have confirmed that Iran has been in full compliance for the past three years.
Trump’s evident bad faith and lies towards Iran and his outrageous dictate to the international community on how it conducts sovereign business are ensuring that Washington will become further isolated as a rogue state, which is viewed as being beyond the pale of international norms and diplomacy. US global standing is in free fall, soon to be followed by the status of the dollar.
The Trump administration’s attempt at playing hardball over Iran is like the spoilt brat picking up the ball, stomping his feet and threatening the others that he is going away. In the case of the US, the others are saying, “Go ahead, good riddance.”