How its Iran Sanctions hurt US Economy: Cutting off your Nose to Spite Your Face

The National Iranian American Council

There are very few studies measuring the cost of sanctions to the sanctioning countries. In the case of Iran, where unprecedented U.S. and international sanctions may soon be lifted as part of a deal over Iran’s disputed nuclear program, understanding the cost of the policy is particularly important since any debate over whether to exchange sanctions relief for limitations to Iran’s nuclear program would be incomplete at best and misleading at worst if it did not address the cost of sanctions. This report aims to provide just that (click here).

Between 1995 and 2012, the U.S. sacrificed between $134.7 and $175.3 billion in potential export revenue to Iran. The United States is by far the biggest loser of all sanctions enforcing nations. From 1995 to 2012, the U.S. sacrificed between $134.7 and $175.3 billion in potential export revenue to Iran.

• These estimates reflect the loss solely from export industries, and do not include the detrimental economic effects of other externalities of Iran-targeted sanctions, such as higher global oil prices. Moreover, since sanctions have depressed the Iranian GDP, Iran’s imports would have been even higher in the absence of sanctions, which further would increase the economic costs to sanctions enforcing nations due to lost exports. Consequently, the full cost to the U.S. economy is likely even higher.

• There is also a human element, measured in terms of jobs needed to support higher export levels. On average, the lost export revenues translate into between 51,000 and 66,000 lost job opportunities each year. In 2008, the number reaches as high as 215,000-279,000 lost job opportunities.

• Texas and California are likely the biggest losers in terms of lost employment, due to their size as well as the attractiveness of their industries to Iran’s economy.

• Between 2010 and 2012, sanctions cost the EU states more than twice as much as the United States in terms of lost trade revenue. Germany was hit the hardest, losing between $23.1 and $73.0 billion between 2010-2012, with Italy and France following at $13.6-$42.8 billion and $10.9-$34.2 billion respectively.

The NIAC report is here

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related video added by Juan Cole:

VOA from a few days ago: “Iran Talks Enter Crucial Phase”

3 Responses

  1. “On average, the lost export revenues translate into between 51,000 and 66,000 lost job opportunities…”

    The implication here seems to be that, if Persia had never existed, there would be a permanent, equilibrium increment in US unemployment equal to the number of people who would have been employed in producing exports to a (in that world) hypothetical Persian trading partner. This makes no economic sense.

  2. Business 101 . . .

    – ALL humans needs and wants will be fulfilled for fun and profit and no political entity can prevent it.

    – Evading taxes, tariffs and blockades for fun and profit succeeds very well most of the time. In fact some cultures are largely based on smuggling and evasion.

    The US has had complete US sanctions on Iran since 1979 and it has achieved nothing at all.

    Since the US sanctions do not work at all, the US has tried to use third=party sanctions. That is, punish third parties who trade with Iran. This worked for a while, but as noted above, those sanctions are rapidly falling apart because most of the world resents the US trying to prevent them from making profits.

    By the end of 2014, no matter how much the US congress critters weep and wail, most of the third party sanctions will be gone. and the US will be completely blocked form imposing any more.

    China wants to create a new banking system to replace the US controlled one and they are quietly using the very heavy-handed US manipulation of the global banking system to try to punish Iran to convince other countries to join with them. The goal is to dump the US dollar as the reserve currency, or at least make a parallel reserve currency, so the US loses all power to us the banking system as a weapon.

    The bottom line is Iran has stuff to sell that others want to buy and Iran wants to buy stuff that other make and the US has zero ability to prevent that over the long term.

    I suspect that Obama understands the life of the sanctions is very limited and that is why he is trying so hard to get the best deal he can with Iran before all the US leverage is gone.

    In reality, Iran will continue to be a regional power and will have the ability to make as much nuclear fuel as they want and there is absolutely nothing Israel or the US can do about it. If Israel attacks Iran, it will fail and might even end up being mortally damaged.

  3. …but the sanction, speaking of California, have been very very good to one set of our oligarchs, the little wealthy Republican campaign contributing family that owns most of the pistachio business now. link to mondoweiss.net Loyal Americans…

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