USA and Iran are at odds again. Find out why.


The United States of America (US) has been at odds (in disagreement) with several countries. These differences of opinion range from trade wars with China and the EU, to the US threatening to leave NATO, and include its ongoing discord with Iran. 

The US government recently pulled out of the Iran Nuclear Deal ignoring requests from other world powers who had signed the deal, including Britain, France, Germany, China and Russia.

Quick Recap:

Iran Nuclear Deal

What is the Iran Nuclear Deal?

The US has imposed sanctions or economic punishments on Iran off and on since 1979. The world has been worried because Iran has been developing nuclear weapons and the developed world doesn’t want to see nuclear weapons in the hands of unstable regions. The sanctions have meant that no one has really been trading with Iran for many years.

In 2015, US President Barack Obama and other major World Leaders succeeded in making a deal with Iran. The deal said that Iran would cut down its investment in the development of nuclear capabilities and that it would allow international inspectors to visit their nuclear facilities and see what they are up to. In return, they would lift the sanctions and the world would trade with Iran. This meant that Iran would then be able to grow its trade and do better for its people.

Why did the US back out of the deal? When US President Donald Trump took office, he voiced his disapproval of this deal. He didn’t think that this was a great deal for the rest of the world and wanted tighter control over Iran’s nuclear capabilities. So, he pulled the US out of the nuclear deal with Iran in May 2018, and reimposed sanctions on Iran. This means that once again, the USA will not trade with Iran.

Presiden Trumps imposes new sanctions on Iran

So why are we talking about this again in August? The US hoped that its allies Britain, France, Germany and the European Union would also pull out of the nuclear deal. However, the other countries continue to support the nuclear agreement and have urged their firms to continue to do business in Iran.

So in retaliation, the US has imposed a new set of sanctions on Iran. This time, Trump went one step further and said that companies doing business with Iran will be banned from doing business with the US.

In essence, the US is bullying its allies into supporting sanctions and is pressuring major European and Asian companies to choose between the tiny Iranian market and the large lucrative American market.

For example, the German maker of Mercedes-Benz cars and trucks announced that they have suspended activities in Iran because of sanctions as they don’t want to risk their US business. Similarly, European Banks are refusing to do any business connected to Iran, for fear of being punished by the U.S.

What are some of the sanctions?

The sanctions will limit Iran’s export of oil and gas, carpets and certain foods to the rest of the world. They will limit imports of raw materials and other essential parts into Iran that will hit Iran’s growing steel, aluminum and automotive sector. Iranian companies will lose business and cut jobs. This will lead to more unemployment and lower wages. People will be unable to buy food and medicines.

Iranian President Hassan Rouhani

So basically through these new set of sanctions, the US is trying to isolate the Iranian economy and pressurize the Iranian regime to re-negotiate a stricter nuclear deal with the US.

Will this new set of sanctions bully Iran into a stricter nuclear deal? Will new sanctions hurt the regime or the Iranian people? How long will EU countries be able to support the nuclear deal and Iran?

Written By: Biyash Choksey and Sunaina Murthy

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