Iran's Economy Could Take A Big Hit After U.S. Reimposes Sanctions

NOEL KING, HOST:

At midnight last night, the U.S. reimposed some of the economic sanctions on Iran that it had lifted after the 2015 nuclear deal. As part of that deal, Iran agreed to limits on its nuclear program. But President Trump pulled the U.S. out of the deal in May. And now his administration is warning other countries that trading with Iran could keep them from doing business with the U.S.

NPR's Peter Kenyon has been following the Iran nuclear deal for years, and he joins us now from Istanbul. Good morning, Peter.

PETER KENYON, BYLINE: Hi, Noel.

KING: All right, so what were these sanctions on Iran that were imposed at midnight?

KENYON: Well, they cover several different areas. Bringing U.S. dollars into Iran could be sanctioned or spending large amounts of Iranian money outside Iran. Then there's sanctions on gold and copper, steel, coal, the automotive sector, all the way down to pistachios and Persian carpets. This is all part of President Trump's plan to achieve what he calls maximum pressure on Iran. The idea is to get Iran back to the table for talks on its behavior in the region, its missile program and maybe even to negotiate a tougher nuclear deal than the one we have now.

KING: All right, so how are Iran's leaders reacting to all of this? Because getting out from under U.S. sanctions was a big part of their motivation for signing the original deal. So they can't be too happy.

KENYON: Right. It was the motivation for the original deal. And Iran has already charged the U.S. with violating that agreement. President Hassan Rouhani gave an interview last night. First of all, he said Trump's offer of direct talks is not something to be trusted because the U.S. can't be trusted. So how can anyone negotiate now? Up to this point, Iran is still complying with the deal. It hasn't walked away. But there are questions about how long that can stay the case as the sanctions begin to bite.

And we're already seeing economic pain in Iran. There have been street protests since, well, December. And they are back now stronger than they have been in months. The U.S. says it's pressuring the Iranian regime, but it's the public that's feeling the pain. And we should note as well, though, that these protesters are complaining about Iranian economic mismanagement at this point, not outside sanctions.

KING: All right, Peter, the president has been tweeting this morning. Here's what he says - quote, "the Iran sanctions have officially been cast. These are the most biting sanctions ever imposed. And in November, they ratchet up to yet another level. Anyone doing business with Iran will not be doing business with the United States. I am asking for world peace, nothing less" - exclamation point, end quote. Let's talk about one aspect of this. The sanctions ratcheting up in November - what is the president referring to there?

KENYON: Well, that means that oil will be the target. And that is Iran's primary economic engine, the heart of its revenue source. So in the meantime, you've got the Europeans, the Russians and the Chinese and India as well all saying they would like to keep trading with Iran. What is remaining to be seen is if they can do that depending how aggressively Washington enforces these sanctions and how effective they are. Europeans have passed a law to try and protect their companies, but we don't know how well that will work. And as we said, the oil sanctions are coming. So it could ratchet up.

KING: NPR's Peter Kenyon on the line from Istanbul - Peter, thanks so much.

KENYON: Thanks, Noel. Transcript provided by NPR, Copyright NPR.