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WASHINGTON — President Trump’s latest sanctions against Iran will target the country’s non-oil industries and ruling elites while the U.S. will ratchet up enforcement of existing sanctions, VICE News has learned.
The announcement of the new sanctions that Trump promised Wednesday is “imminent,” and they are expected to be implemented by the end of this week, according to a senior administration official.
But the sanctions’ pressure on Iran may be like the "Spinal Tap" joke about turning the volume up to 11: It’s already as high as it can go.
The Trump administration has already been running an official policy of “maximum pressure” — including severe sanctions on every key sector of Iran’s economy. It’s not clear much more can be done to hurt the country economically. Even if Trump’s team can find creative new ways to craft sanctions, experts uniformly doubt there’s any chance it would change Iran’s behavior.
“The trouble with ‘maximum pressure’ is that either it’s maximum or it isn’t,” said Daniel Fried, who served as the State Department’s coordinator for sanctions policy from 2013 to February 2017. “What’s going to be greater than maximum? Sanctions experts who’ve been looking at this are scratching their heads.”
Trump pulled out of the Iran nuclear agreement in May 2018, and slapped back in place U.S. sanctions that had been removed when Iran made a deal to give up its nuclear program. That included a wholesale effort to keep Iranian companies out of the international banking system as well as far-reaching sanctions on Iranian products, with crude oil at the top of the list.
That November, the Trump administration added 700 individuals and businesses to its sanction list — more than half of which hadn’t been sanctioned before the Iran nuclear deal. Secondary sanctions against people who refuse to abide by the U.S. sanctions are already in place. Last June, the administration added still more sanctions against Iran, but even those were gilding the lily. Those sanctions have caused dire economic circumstances and shortages of food and basic medicine in the country.
The president on Wednesday said he’d further punish Iran, threatening deeper economic damage even as he moved to de-escalate military tensions with the country.
"As we continue to evaluate options in response to Iranian aggression, the United States will immediately impose additional punishing economic sanctions on the Iranian regime," Trump said. "These powerful sanctions will remain until Iran changes its behavior."
Former government officials with experience on sanctions implementation disagreed on whether the U.S. could inflict any more real pain on Iran. Some said things were ratcheted up about as high as they could go. Others told VICE News that more pain could be inflicted by targeting those foreign companies that are still doing business with Iran, especially the small handful that are still buying its oil.
“Even if the targets inside of Iran have been essentially covered, there are still people who are trading with Iran,” said Adam Smith, a former adviser to the director of the Treasury Department’s Office of Foreign Assets Control, which administers sanctions policy. “As long as Iran is not a hermit, there is still exposure, and there’s still some leverage.”
Yet Iran’s economy has already been heavily battered by sanctions, and even experts who think there might be creative ways to administer more punishment wonder what policy goals that would actually serve.
“There are things the administration could still do, but whether they would be meaningful at this point is dubious,” said Erich Ferrari, a lawyer specializing in sanctions law. “Anyone who has not yet been dissuaded from dealing with Iran as a result of U.S. sanctions will not be dissuaded from doing so by whatever the administration does next.”
The promise of more sanctions may be mostly a face-saving gesture — tough talk for Trump as he looks to de-escalate a mounting military crisis of his own creation. Trump’s decision to kill a top Iranian general last week led Iran to strike two U.S. military bases in Iraq in response. But there weren’t any U.S. casualties in the strikes, and Trump said Iran had chosen to de-escalate.
The Trump administration official described the last week of administration deliberations as hectic and “touch and go,” saying that Iran’s missile strikes Tuesday night “could've taken us over the edge if Iran played it the wrong way."
Representatives from the White House and the Treasury Department didn’t immediately respond to questions on what additional sanctions could be placed on Iran, while a State Department press official said that the government “does not preview sanctions decisions.”
Democrats in Congress wondered what more could possibly be done.
“The administration has already said that we're in the midst of a maximum pressure campaign. So if they already put forth maximum pressure, at least through the context of economic sanctions, what more is there to do?” House Democratic Caucus Chairman Hakeem Jeffries (D-N.Y.) told VICE News on Wednesday.
“What have we not done?” said Rep. Eric Swalwell (D-Calif.).
Cover: Mourners carry images of Iranian General Qassem Soleimani during the funeral ceremony in Tehran, Iran, on Monday, Jan. 6, 2020. (Photo: Ali Mohammadi/Bloomberg via Getty Images)