German exports to Iran fell by 48% to $759mn in the first half of this year and Iran's sales to Germany for the same period dropped 43% to $123mn, according to the BGA (Federation of German Wholesale and Foreign Trade) trade association.
The figures provide a stark example of the destructive toll taken by the US sanctions regime aimed at the Islamic Republic and any companies that attempt to keep trading with it. And they underline why the Iranians are so disappointed in Europe when it comes to efforts to protect their country from Washington’s “economic attack”. The feeling is that major European powers Germany, France and the UK have done next to nothing to help and that the British, badly in need of keeping the Trump administration sweet in the runup to the planned late autumn Brexit, will become more and more closely aligned with American policy on Iran.
Since the sanctions were gradually introduced across the second half of last year, European companies have generally withdrawn from Iran and ceased doing business with the country out of fear that they could be hit by US sanctions that, for instance, could shut them out of the global financial system or put the US market beyond their reach.
"German companies are forced to choose between their market activities in Iran and the United States, so it's clear which market is preferred," the BGA trade association told Reuters.
Iran, already plunged back into recession by the impact of the US sanctions, will see its economy shrink by 6% this year, the International Monetary Fund projects.
The most damaging set of sanctions imposed on Iran by the US target reducing the country’s oil exports to nil. Tehran has warned that the Islamic Republic could move to block all energy exports attempting to pass through the Strait of Hormuz—the world’s busiest energy shipments chokepoint through which a fifth of global oil passes—if the sanctions mean it proves unable to sell oil.
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