Trump said the new sanctions will deny Iran access to financial resources. Photo / AP
The Trump administration targeted Iran's supreme leader with new sanctions yesterday, using one of the few tools available to punish Iran for downing a U.S. drone after President Donald Trump took military strikes off the table last week.
Trump warned that his "restraint" might not last, but he appeared to muddy his own tough message with a vague threat to end US protection for international shipping in the vital Strait of Hormuz, off Iran.
The US economic penalties are part of Trump's strategy to drive a weakened Iran to the bargaining table for new talks over its nuclear ambitions. The sanctions were announced as Secretary of State Mike Pompeo began recruiting allies, including Saudi Arabia and the United Arab Emirates, to help monitor threats from Iran in the Persian Gulf.
It is far from clear that Iran will buckle. Iran's U.N. ambassador said yesterday that any thought of negotiation is "not ready yet." He also disputed claims that Iran was behind a recent string of attacks on oil tankers and other provocations against nations operating in the region, including the United States.
Trump said the new "hard-hitting" sanctions will deny Iran's supreme leader, Ayatollah Ali Khamenei, and several other top officials access to financial resources. The administration also plans to target Foreign Minister Mohammed Javad Zarif with economic sanctions later this week.
The measures mean that any foreign financial institutions that provide significant "financial services" to any of the Iranian officials would be subject to U.S. penalties.
"The assets of Ayatollah Khamenei and his office will not be spared from the sanctions," Trump said. The president mispronounced the Iranian clerical leader's name as "Khomeini," which was the name of the former leader who died in 1989.
The decision to target Khamenei directly suggests that Trump is attempting to turn up pressure on the leader who would decide whether to accept an invitation to new negotiations over Iran's nuclear program. Trump's titular counterpart is President Hassan Rouhani, who presided over the 2015 international nuclear deal that Trump rejects as flawed and weak.
Trump withdrew the United States from the pact last year and began increasing sanctions in a campaign his critics say is aimed at further undermining the nuclear deal and forcing the regime's collapse.
"The supreme leader of Iran is the one who ultimately is responsible for the hostile conduct of the regime," Trump said as he signed an order imposing the sanctions, which come atop dozens of previous economic penalties applied over Iran's alleged support for terrorism and other actions.
"He's respected within his country. His office oversees the regime's most brutal instruments, including the Islamic Revolutionary Guard Corps," the president said, which the United States blames for an attack on two tankers near the Strait of Hormuz on June 13.
Trump appears to be gambling that the pressure campaign will compel Iran's leadership to agree to a new nuclear agreement and not prompt it to lash out militarily for what it views as an illegal effort to strangle Iran's economy.
But analysts said the United States is reaching a point of diminishing returns when it comes to sanctions pressure.
"The entities that Khamenei's office controls have already been subject to U.S. sanctions," said Suzanne Maloney, an Iran scholar at the Brookings Institution. "Any new measures are only incremental and possibly redundant. The Iranian economy has already been forced to become more insular and less interconnected - which leaves the residual economic activity paradoxically more resilient to U.S. restrictions."
Beginning last year, when Trump withdrew from the nuclear deal, his administration has
effectively banned Iranian oil exports, the country's main revenue source, and moved onto smaller targets such as the iron, steel, aluminum and copper industries.
"Further economic sanctions are almost entirely symbolic, rather than being economically significant," said Elizabeth Rosenberg, a sanctions expert at the Center for a New American Security. "Sanctions at this point are a sideshow to the real threat of military escalation and all-out war."
Despite his aversion to a military strike, Trump said he has legal authority to order such an action without congressional approval, something some lawmakers has insisted he obtain. "I do like keeping them abreast, but I don't have to do it legally," he said in an interview with the Hill on Monday.
On Monday, the Trump administration presented a case against Iran at the U.N. Security Council, arguing that Iran or its proxies were behind numerous assaults in the Middle East. The United States was not directly targeted in those actions, until the drone attack.
Iranian Ambassador Majid Takht Ravanchi told reporters at the United Nations that the unmanned "spy" plane violated Iranian airspace and ignored repeated radio warnings before it was shot down. The United States maintains that the aircraft was flying over international waters.
"We cannot accept any intimidation or any threat from anybody," said Ravanchi, who helped negotiate the 2015 nuclear deal. He called for a regional dialogue under U.N. auspices and appeared to dismiss direct negotiations with Washington.
"How can we start a dialogue with somebody whose primary preoccupation is to put more sanctions on Iran?" he said. "So the atmosphere for such a dialogue is not ready yet."
Trump continued to sound optimistic about the prospects for a new deal that he says would do more to prevent an Iranian nuclear bomb than the existing agreement.
"We would love to be able to negotiate a deal if they want to. If they don't want to, that's fine, too. But we would love to be able to," Trump said in the Oval Office. "And, frankly, they might as well do it soon."
Treasury Secretary Steven Mnuchin said the sanctions against senior military commanders "will lock up literally billions of dollars more of assets."
These sanctions block access to the United States financial system and any assets the officials might hold in the United States. The order Trump signed gives Mnuchin authority to target other officials appointed by Khamenei.
Mnuchin stressed that the sanctions were not intended to hurt the people of Iran but were aimed at the country's leaders. "I want to be very clear. We are not looking at creating issues for the people of Iran," he said.
However, U.S. sanctions have devastated Iran's currency, making everyday goods such as fruits, vegetables, car parts and mobile phones exceedingly expensive for average Iranians.
The sanctions, which have strained U.S. relations with Europe, have elated Washington's allies in Israel and Arab Gulf states. But the president has shown frustration in doing most of the heavy lifting.
Trump complained on Twitter that the United States is "protecting the shipping lanes for other countries" and suggested he could stop U.S. naval patrols at the entrance to the Persian Gulf, one of the world's most volatile flash points.
"All of these countries should be protecting their own ships on what has always been a dangerous journey," Trump wrote.
Pompeo reiterated that message Monday during his meeting with Mohammed bin Zayed, the crown prince of Abu Dhabi. Asking for military help with maritime security, Pompeo said "we'll need you all to participate, your military folks."
"The president is keen on sharing that the United States doesn't bear the cost of this," he added.
Zarif, the Iranian foreign minister, retorted in a tweet that Trump "is 100% right that the US military has no business in the Persian Gulf. Removal of its forces is fully in line with interests of US and the world. But it's now clear that the #B_Team is not concerned with US interests - they despise diplomacy, and thirst for war."
Military officials have said a new program for international cooperation on maritime security in the Persian Gulf is still in the early stages. It will require foreign nations from Asia and the Gulf region to provide payment or naval assets to help monitor and protect maritime commerce in the Middle East, said one official, who spoke on the condition of anonymity to discuss a program that as not been finalized.
Countries that buy and sell oil in the region would be asked in certain cases to escort ships, place vessels at fixed positions in the region or provide maritime patrol aircraft.
Pompeo also met with King Salman and his son, Crown Prince Mohammed bin Salman, on Monday in Saudi Arabia, which has signed onto the plan.
It comes after the US recently struck nuclear sites in Iran.