President Donald Trump allowed his administration to apply tariffs to goods from countries that trade with Iran, but did not immediately impose any new tariffs.
The executive order signed by Trump on Friday said the tax “may be imposed on goods imported into the United States that are products of any country that directly or indirectly purchases, imports or otherwise obtains any goods or services from Iran.”
Trump first threatened the duty on social media in mid-January, saying it would be effective immediately. But until Friday, no document codifying the policy had ever been issued. The action has the potential to disrupt major US trade relationships around the world, including countries such as India, Turkey and China.
The regulation empowers the foreign and trade secretaries to jointly determine whether certain countries have met the criteria. Once a finding is made, the policy empowers them — in cooperation with the Office of the U.S. Trade Representative and the Department of Homeland Security — to decide “to what extent an additional” tariff should be applied.
Trump has not specified the rate that will be imposed, but is using as an “example” the 25% rate that he first threatened against Iran’s trading partners.
Iran and the US engaged in their first face-to-face talks earlier Friday in Oman in a bid to ease tensions between Washington and Tehran and avert a military confrontation.
The source of the latest shock was weeks of mass protests that have rocked the Islamic Republic. The demonstrations were initially prompted by the currency crisis and deteriorating economic conditions, but have increasingly been directed against the regime. It is the biggest challenge to the nation’s system of government since 1979.
Trump encouraged the protesters and threatened strikes if Iran’s leaders continued to crack down violently on the protests. He told reporters last month that he was glad authorities had decided not to execute the prisoners, seemingly delaying an imminent attack on Iran. Meanwhile, a large US Navy strike group has traveled to the region in case of any action.
More such stories are available at bloomberg.com