In the days since some U.S. sanctions on Iran snapped back into place, the signs of misery have been everywhere in Tehran’s commercial districts.
Stores are open but empty. Shopkeepers pass the time on their cellphones and exchange tales of economic woe: prices soaring, workers laid off, inventory going stale.
President Trump has said his goal is to place “maximum economic pressure” on a country he accuses of fomenting instability and backing U.S. adversaries across the Middle East.
But many Iranians believe the Trump administration wants to topple the theocracy in place since the 1979 Islamic Revolution — a risky policy that Iran’s deeply entrenched clerical establishment has many ways to survive.
Meanwhile, the sanctions are falling hardest on ordinary Iranians, with the toughest restrictions yet to come.
Two phases of renewed U.S. sanctions
When Trump withdrew in May from a multilateral agreement governing Iran’s nuclear program, he set in motion a 180-day plan to reinstate U.S. sanctions that were in place before the deal was struck in 2015 between Iran and six other nations: the United States, Britain, China, France, Germany and Russia. Anyone trading with Iran in violation of the sanctions risks being barred from the U.S. financial system and losing access to dollars.
The sanctions go back into effect in two stages.
The first phase blocks Iran from purchasing U.S. dollars and imposes penalties on companies for selling Iran auto parts and commercial planes, which Trump administration officials allege Tehran could use to smuggle weapons to Syria.
The second phase is expected to deliver more pain because it targets oil exports, which account for one-fifth of Iran’s economy. But the effect was felt even before the first phase went into place this month.
What changing prices say about Iran’s economic troubles
As the Trump administration edged closer to leaving the nuclear deal, Iranians fearing an economic crash rushed to stockpile foreign currency.
The Iranian rial has lost more than half its value since January, and this month the dollar climbed to an all-time high of more than 100,000 rials on the unofficial market.
Foreign investors apply the brakes
Oil sector to see biggest effect
Some of Iran’s trading partners signal support — for now
Will sanctions exacerbate antigovernment sentiment in Iran?