Protesters burn an American flag and a U.S. one-hundred dollar bill during a demonstration on the anniversary of the U.S. embassy seizure, in Tehran, Iran. (Photographer: Ali Mohammadi/Bloomberg)

Trump Bans Trade in Iranian Metals, Ratcheting Up Tensions

(Bloomberg) -- President Donald Trump issued an executive order on Wednesday prohibiting the purchase of Iranian iron, steel, aluminum and copper, ratcheting up tensions with the Islamic Republic less than a day after it declared it may begin enriching uranium again in two months.

Trump said in his order that the prohibition on trading in the Iranian metals -- the country is the world’s 18th largest steel exporter -- is aimed at preventing Tehran from developing a nuclear weapon or intercontinental ballistic missiles.

The president seeks to deny the Iranian government money “that may be used to provide funding and support for the proliferation of weapons of mass destruction, terrorist groups and networks, campaigns of regional aggression, and military expansion,” according to the order.

Since ending U.S. participation in the 2015 nuclear accord that the Obama administration and other countries, negotiated with Iran, the president has reimposed a series of sanctions on Iran’s economy. The latest order aims to discourage foreign companies and countries that may still be trying to maintain business with Iran.

The metals represent Iran’s third-largest source of export revenue, according to three administration officials who briefed reporters and asked that their names not be used. They say they may eventually target the second-largest source of export revenue: petrochemicals.

The officials said Trump is willing to meet with Iranian leaders, if they request it, but that he won’t lift sanctions to bring them to the table.

Iran said earlier on Wednesday that it would abandon limits on uranium enrichment that it agreed to under the 2015 deal in 60 days unless European signatories to the accord can find a way for the country to engage in trade despite U.S. sanctions. The U.S. officials declined to say whether Trump is prepared to use military force if Iran follows through on the threat but indicated skepticism Tehran would do so.

Earlier this month, the U.S. revoked waivers that had allowed eight countries including India and China to import Iranian oil despite American sanctions. The Trump administration seeks to drive Iranian oil exports to zero to force Tehran to abandon support for militant groups in the Middle East and renegotiate the 2015 accord.

Trump has criticized the deal the Obama administration negotiated as insufficiently strict on the Iranian regime.

“Under the Iran nuclear deal, Iran was free to engage in and sponsor terrorist networks, develop its missile force, foment regional conflicts, unjustly detain United States citizens, and brutalize its own people, all while maintaining a robust nuclear infrastructure,” Trump said in a statement.

“Because of our action, the Iranian regime is struggling to fund its campaign of violent terror, as its economy heads into an unprecedented depression, government revenue dries up, and inflation spirals out of control,” he said.

He added he’s willing to meet with Iranian leaders “someday”, as he has with North Korea’s Kim Jong Un, “in order to work out an agreement and, very importantly, taking steps to give Iran the future it deserves.”

Iran exported about 138,000 tons of copper in 2018, according to Bloomberg Intelligence analyst Andrew Cosgrove.

The country exported about 9.24 million tons of steel in 2018, according to the International Trade Administration, a bureau within the Commerce Department.

Iran exported about 200,000 tons of aluminum in 2018, none of it to the U.S., according to Harbor Intelligence.

Trump said metals amount to about 10% of Iran’s exports.

©2019 Bloomberg L.P.