How America's Economy has been Hurt by Sanctions on Iran: Cutting off your Nose to Spite Your Face

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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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