Haley's Ridiculous Demand to Escalate Economic War Against Iran and China

Haley makes the economic war against Iran an end in itself.

Nikki Haley reminds us why we are fortunate that she is no longer representing our country at the U.N.:

Iran and China have recently taken their alliance a step further. Last year, they finalized a “strategic partnership” that commits Beijing to investing $400 billion in Iran over 25 years. In exchange, China will get long-term access to discounted Iranian crude supplies and deepen its presence in Iran’s ports, railways, telecommunications and elsewhere. The agreement also strengthens their military ties.

Haley is wrong to say that Iran and China have an “alliance.” The agreement she cites creates nothing of the kind, and China already has more significant economic relationships with Iran’s neighbors and rivals than it has with Iran. She credulously repeats a $400 billion figure that seems to be based on nothing. A few early reports included this bogus figure, and then it has been repeated despite the fact that it makes no sense. Bill Figueroa explained this last year:

Third, the terms of the document itself have been greatly exaggerated. The quoted figure, four hundred billion dollars, seems extraordinarily unlikely given China and Iran's current economic capabilities and the impact of international sanctions. Claims that Chinese military personnel will be stationed in Iran are similarly dubious. Doing so would also be nearly impossible given the Iranian public's long-standing hostility to the presence of foreign armies and the legacy of repeated British and Russian occupations. The Chinese and Iranian press have also been silent on the news, and Iran's oil minister Bijan Zanganeh denied that such massive investment was incoming. According to Scita, the head of the Iran-China Chamber of Commerce, also referred to the report as "a joke." It seems clear that no massive investment is forthcoming.

So much for the grand Sino-Iranian alliance. Haley and the other hawks at the misnamed United Against Nuclear Iran (UANI) are not interested in accuracy. They will latch on to any claim, no matter how false, to bolster their fearmongering about Iran and China. Haley wants to exaggerate the significance of Iran-China ties to build support for taking a harder line against both, and in the process she confirms once again that Iran hawks in general and UANI in particular have no interest in resolving the nuclear issue. They prefer to keep it around so that they can demagogue it and use it as an excuse for more coercive policies.

One of Haley’s many bad ideas is to have Congress pass legislation to sanction China’s central bank. This would be absurd overreach, and it would guarantee Chinese retaliation. China and Iran are engaged in legitimate international commerce. There are no international sanctions that bar Iran from selling China their oil. The fact that the U.S. doesn’t want Iran to earn revenue from its oil sales doesn’t make this commerce illicit, and it doesn’t justify placing sanctions on China’s central bank. Confronted with the failure of “maximum pressure” in Iran, Haley is calling for escalation against China. That could have unforeseen consequences for U.S. interests and businesses that Haley doesn’t even bother to consider.

Haley makes the economic war against Iran an end in itself, and she imagines that further strangling Iran’s commerce somehow represents a “win” for the United States. She doesn’t even pretend to believe that more sanctions enforcement and additional sanctions will lead to greater Iranian concessions on anything. Her goal is simply to punish and isolate Iran as much as possible, but if the administration did what she wanted it would likely backfire and give China new incentives to cooperate with Iran more than it has.

It can’t be stressed enough that the effort to choke Iran into submission through sanctions is aggressive economic war and the burden of that war falls heaviest on ordinary Iranians. It does not achieve anything except spreading misery and causing preventable deaths, and Haley wants to escalate the war. The U.S. doesn’t “win” anything by continuing to strangle Iran’s economy, and if the Biden administration were serious about finding a diplomatic solution they would suspend or lift all Trump-era sanctions as quickly as possible.