Thursday January 23, 2020
On January 10, Secretary of State Mike Pompeo and Secretary of the Treasury Steve Mnuchin announced new economic sanctions imposed on Iran in response to its missile strikes against US forces in Iraq. The sanctions target enterprises operating in the manufacturing, textile, construction, and mining sectors. President Trump said that “These punishing sanctions will remain until the Iranian regime changes its behavior.”
The Iranian strikes were in retaliation to the US drone attack that killed Qasseim Soleimani, the powerful Iranian general and leader of the Quds Force. Thankfully, President Trump has chosen not to respond with any military action so as to avoid a full-blown war.
Nevertheless, new sanctions on Iran probably won’t change much. A long history of failed sanctions, which weren’t able to change the opposing regimes, can attest to that.
The Unintended Economic Consequences of Trade Sanctions
Almost ten years ago, Jonathan Catalán wrote an article on this same issue for the Mises Wire. Things haven’t changed since then. Governments continue to enforce trade restrictions on rival nations. Catalán explained that...