Caveat One: Trump might not the bumbling egoistical educationally sub-normal maniac we are told to think he is, he might be an all-seeing, all-knowing genius whose only aims are free trade and world peace and who can predict his opponents' moves several moves in advance.
Caveat Two: Countries don't trade with countries; individuals and businesses in Country A buy stuff from, and sell stuff to, individuals and businesses in Country B. But for short-hand, let's accept that Country A trades with Country B.
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OK, here goes, from the BBC:
US President Donald Trump has issued a strong warning to anyone trading with Iran, following his re-imposition of sanctions on the country.
"Anyone doing business with Iran will NOT be doing business with the United States," the president tweeted.
If a large country or trading bloc imposes sanctions on a smaller country, then the loss, in absolute terms is probably the same for each side, but the larger country/bloc only loses 1% of its GDP and the smaller country loses 10%. So the larger country/bloc should ultimately 'win'.
So if the choice is between trading with the USA or trading with Iran, most countries would prefer to trade with the USA. But the USA has imposed sanctions on Cuba, Iran, North Korea, Russia, Sudan, Syria, and Venezuela and imposed fairly hefty tariffs on certain imports, especially those from PR China. By extension, any country - if not already the victim of the USA's import tariffs - that trades freely with those countries ends up itself on the USA's naughty list.
Surely, there must come a stage at which so many countries are on the naughty list, that they form a trade bloc which is actually larger than the USA, so third countries can benefit by turning their backs on the USA and freeing up trade between themselves and 'everybody else', thus accelerating the long term fall in USA's GDP as a percentage of global GDP?
Unlikely to happen, but theoretically possible.
Crass stupidity
1 hour ago
7 comments:
The USA has enormous power to enforce its sanctions policies not via nations, but via the global banking system. It can withdraw the ability of any bank to clear dollars, which effectively puts it out of business. Any bank that facilitates payments to any sanctioned country will either be fined, or shut down. Refer to fines a few years ago of up to $9bn on BNP, Deutsche, and Standard Chartered without having to involve respectively France, Germany or the UK. In the real world as a practical example this meant that in the UK when we did not have sanctions against Iran, you could no longer buy pistachios via eBay from Iran because PayPal would not handle the payment.
oth. Yes, USD hegemony is a major problem, whilst the world uses USD as the universal currency. Trouble is what do you replace it with? The Euro (!). The Yuan (Maybe).
And MW, eventually all high tariffs have the worst effect on the nation or bloc that applies the tariffs.
OTOH, that can't be true. Or else how do banks in Iran or Venezuela work?
L, nothing to stop people using any currency they like. Iran sells oil in dollars, afaiaa.
PayPal would be easy to replicate, not an issue.
Yes it is true. If you are a global bank that needs to transact dollars, you had better not facilitate any payments to US sanctioned countries or they will fine you billions or shut you down.
Venezuelan and Iranian banks cannot get USD, other than heavily controlled drips from state reserves.
You can't just replicate PayPal. Venezuela tried that by creating a Petro based crypto-coin, but it has suffered the same problem - no global bank will allow the payment in to buy the currency. The only single bank in the world that will let you do that is a Russian bank (with no US operations) paying in Euros.
As an individual or a business trying to buy or sell something in Iran, you can elaborately get around the restrictions for a while, but will soon be accused on money laundering and have your UK bank accounts shut even though the UK does not have sanctions...
https://blackstonesolicitorsltd.co.uk/category/uncategorized/how-to-transfer-money-from-iran-to-the-uk/#.W2winvZFwfk
"Iranians are forced to use Iranian money exchange companies which do not have a UK bank account. Therefore, they operate by receiving Rials in Iran into their Iranian bank account and then directing buyers outside of Iran to deposit pounds into the intended recipient’s account. This is how third party and cash deposits are made into bank accounts in the UK which lead to suspicions of money laundering or connections with Iran."
OTOH, sure, it's an uphill struggle. But you'd just need a global bank that trades everywhere except the USA. And enough countries to be bold enough to ignore the USA's endless bullying.
"The only single bank in the world that will let you do that is a Russian bank (with no US operations) paying in Euros."
That single fact probably accounts for all today's whipped-up Russophobia.
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