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The Trump administration imposed extensive sanctions on Iran, focusing on its nuclear program, oil exports, and financial systems, aiming to pressure Iran into renegotiating the 2015 nuclear deal.
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Background: In May 2018, the U.S. withdrew from the JCPOA, reimposing sanctions to limit Iran’s nuclear activities and regional influence.
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Key Measures: Sanctions targeted Iran’s oil exports, reducing them significantly, and cut off financial access by sanctioning major banks. The IRGC was labeled a terrorist organization in April 2019.
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Impact: Iran’s economy shrank, with GDP dropping about 6% annually, inflation soaring, and the currency losing value, causing shortages despite humanitarian exemptions.
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Outcomes: No new deal was reached, tensions rose, including the U.S. killing of an IRGC commander in 2020, and Iran increased uranium enrichment.
Withdrawal and Reimposition
The Trump administration withdrew from the JCPOA in May 2018, leading to the reimposition of sanctions in August and November 2018, targeting over 700 entities to pressure Iran on nuclear and missile programs.
Sectoral Sanctions
Sanctions hit Iran’s oil exports, dropping from 2.5 million barrels per day in 2018 to under 500,000 by 2020, and financial systems, cutting off global banking access. The IRGC and related sectors like petrochemicals were also targeted.
Economic and Social Effects
Research suggests Iran’s economy contracted by about 6% annually from 2018-2020, with inflation at 40% and the rial losing over 60% value, leading to shortages despite exemptions for food and medicine.
International Response
The U.S. enforced sanctions globally, affecting foreign companies, while Iran adapted by increasing smuggling and ties with China and Russia, with no new nuclear deal by the end of Trump’s term in January 2021.
Survey Note: Comprehensive Analysis of Trump Administration Sanctions on Iran
The Trump administration’s sanctions on Iran, initiated as part of a “maximum pressure” campaign, were a significant escalation in U.S. policy, aiming to curb Iran’s nuclear program, missile development, and support for proxy groups while forcing renegotiation of the 2015 Joint Comprehensive Plan of Action (JCPOA). This section provides a detailed examination of the sanctions, their implementation, impacts, and outcomes, drawing from multiple sources to ensure a comprehensive overview.
Historical Context and Policy Framework
The sanctions were rooted in the Trump administration’s decision to withdraw from the JCPOA in May 2018, a multilateral agreement that had lifted previous sanctions in exchange for limits on Iran’s nuclear activities. President Donald J. Trump criticized the deal as inadequate, announcing the U.S. exit and the reimposition of sanctions, which were fully restored by November 5, 2018, targeting over 700 individuals, entities, vessels, and aircraft . The policy was formalized through a National Security Presidential Memorandum, emphasizing objectives such as denying Iran nuclear weapons, neutralizing its terrorist network, and countering missile development .
Detailed Sanctions Measures
The sanctions were multifaceted, targeting various sectors of Iran’s economy and political structure:
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Oil and Energy Sector: A critical component was reducing Iran’s oil exports, which accounted for up to 40% of its revenue. The U.S. ended sanction waivers for countries like China, India, and Japan, aiming to drive exports to zero. By 2020, exports had dropped from approximately 2.5 million barrels per day in 2018 to under 500,000, significantly straining Iran’s economy .
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Financial and Banking Sector: Sanctions targeted Iran’s Central Bank and major financial institutions, cutting off access to the SWIFT banking system and global financial networks. This restricted Iran’s ability to conduct international transactions and access foreign currency reserves, with specific actions in September 2019 sanctioning the Central Bank and the National Development Fund of Iran .
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Metals, Petrochemicals, and Industry: Sanctions extended to Iran’s steel, aluminum, copper, and petrochemical industries, aiming to choke off additional revenue streams. For instance, in June 2019, sanctions were imposed on the petroleum industry owned by the IRGC .
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Nuclear and Missile Programs: Entities involved in Iran’s nuclear and ballistic missile programs, including research organizations and suppliers, were sanctioned, aligning with the administration’s goal to prevent nuclear weapon development .
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Islamic Revolutionary Guard Corps (IRGC): In April 2019, the IRGC was designated as a Foreign Terrorist Organization (FTO), a historic move for a state entity, leading to economic and travel sanctions on the IRGC and its affiliates. Further sanctions in June 2019 targeted eight senior IRGC commanders .
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Individual and Entity Designations: Hundreds of Iranian officials, companies, and vessels were added to sanctions lists. Notable targets included Foreign Minister Mohammad Javad Zarif (July 201 9), Supreme Leader Ayatollah Ali Khamenei and his office (June 2019), and Ayatollah Khamenei’s inner circle, including his son Mojtaba Khamenei (November 2019). Additionally, in October 2020, 18 banks, including Amin Investment Bank and Bank Maskan, were sanctioned .
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Human Rights and Legal Actions: Sanctions were also imposed for human rights violations, targeting judges and prisons in September 2020. The Attorney General was tasked with investigating and prosecuting Iran-sponsored networks and terrorist groups operating in the U.S., seeking arrest and extradition of leaders involved in harming American citizens .
The following table summarizes key sanction actions and their targets:
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Action
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Details/Entities Targeted
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May 2018
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Withdrawal from JCPOA, reimposition announced
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Reimposed in August and November 2018, over 700 entities
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April 2019
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Designated IRGC as FTO
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Economic and travel sanctions on IRGC and affiliates
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June 2019
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Sanctions on Supreme Leader and affiliates
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Ayatollah Ali Khamenei, his office, and closely affiliated individuals
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July 2019
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Sanctions on Foreign Minister
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Mohammad Javad Zarif
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September 2019
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Sanctions on Central Bank and others
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Central Bank, National Development Fund of Iran, others
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October 2020
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Sanctions on financial sector
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18 banks including Amin Investment Bank, Bank Keshavarzi Iran
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September 2020
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Sanctions for human rights violations
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Judges, prisons involved in abuses
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Global Enforcement and International Response
The U.S. enforced sanctions globally through secondary sanctions, penalizing foreign companies and banks that continued business with Iran. This led to the exit of many European firms, as seen in warnings to UK entities using the Instrument in Support of Trade Exchanges (Instex) in May 2019 . The U.S. also worked with allies to “snap back” international sanctions through the United Nations, though this faced resistance from some countries .
Economic and Social Impact
The sanctions had a profound impact on Iran’s economy and society. Research suggests Iran’s GDP contracted by approximately 6% annually between 2018 and 2020, with inflation peaking at around 40% and the Iranian rial losing over 60% of its value against the U.S. dollar . This economic contraction led to widespread hardship, triggering protests in November 2019 that were brutally quashed by authorities. Despite exemptions for food, medicine, and agricultural commodities, banking restrictions caused shortages of essential goods, exacerbating the humanitarian situation .
Iran adapted to these pressures by increasing smuggling, engaging in barter trade, and strengthening economic ties with China and Russia, which became major importers of Iranian oil, taking nearly 90% of exports by 2023 .
Outcomes and Escalation
The “maximum pressure” campaign did not achieve its goal of a new nuclear deal during Trump’s term, which ended in January 2021. Instead, tensions escalated, notably with the U.S. killing of IRGC commander Qassem Soleimani in January 2020, following increased hostilities . Iran responded by increasing uranium enrichment beyond JCPOA limits, citing U.S. violations, which further strained diplomatic efforts .
Conclusion
The Trump administration’s sanctions on Iran were a comprehensive and aggressive policy, targeting multiple sectors and entities to exert economic and political pressure. While they significantly weakened Iran’s economy, they also led to increased regional tensions and Iran’s adaptation through alternative trade routes. The legacy of these sanctions continued to shape U.S.-Iran relations into subsequent administrations, with ongoing debates about their effectiveness and humanitarian impact.
Key Citations
The US on Tuesday announced fresh sanctions on Iranian oil sales to China, as president Donald Trump’s administration continues its “maximum pressure” campaign against Tehran.
The US Treasury said that it is sanctioning nearly two dozen firms that it alleges facilitate Iran’s international oil trade. Sanctioned entities include so-called front companies based in China and Hong Kong.
The Treasury also targeted a VLCC called Balu and an LR1 product tanker called Roc, which officials accused of being used by Sepehr Energy official Elyas Niroomand Toomaj, who was previously sanctioned to facilitate shipments of Iranian oil to China.
“Today’s action underscores our continued focus on intensifying pressure on every aspect of Iran’s oil trade, which the regime uses to fund its dangerous and destabilising activities,” said Secretary of the Treasury Scott Bessent. “The United States will continue targeting this primary source of revenue, so long as the regime continues its support for terrorism and proliferation of deadly weapons.”
The sanctions follow similar designations in recent weeks, at the same time as Washington and Tehran have stepped up nuclear talks.
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