> Re: US threats of "sanctions" against EU corporations and banks for
> trading with Iran...
>
>
> Has EU trade with Iran stopped? What sort of sanctions could the US
> hope to inflict upon Euro Capital? Could these sanctions be put in
> place without producing blow back on American Capital? And finally,
> aren't these threats of economic consequences increasingly weak tea?
> For a time, Congress seemed to threaten Beijing with some sort of
> sanctions every week because of currency valuation complaints. How
> far did/could these threats actually go in the real world of
> interdependence?
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Sanctions can be evaded, but foreign banks and corporations would rather not
have to to work around them and strain their relations with the gatekeepers
to the crucial US market, and sanctions often do have an effect on target
countries. Ask the Cubans, whose economic development has been crippled by
the US blockade for nearly half a century. The Iraqis experienced a decade
of sanctions which drastically weakened their economy and military and paved
the way for the swift invasion and occupation and long stretch of resulting
chaos. The Libyans and North Koreans were both forced to alter course as a
result of US-initiated sanctions.
Sanctions have been less effective against the Iranians because the economic incentives to circumvent them have been greater for the Europeans, Russians, and Chinese but they have still reportedly hindered further development of the national oil industry. The Iranians were not taking the latest proposed round of deeper sanctions lightly, and there is some evidence that the Europeans and even the Chinese were beginning to bend to heightened American pressure. In the summer, Germany's Deutsche Bank and Commerzbank - the two largest European banks to continue doing business with Iran - agreed to end most of their ties to Iranian companies. In November, Chinese state banks refused to open letters of credit for Iranian businessmen in compliance with renewed calls by the US and the UN to do so.
The NIE report has effectively undercut the threat of further sanctions against Iran. But we'd be mistaken in thinking that the US retreat from confrontation with Iran has primarily been the result of opposition by the Europeans and the other powers. Foreign policy considerations have been a factor, but it's mostly been internal pressure from within the US military and corporate establishment alarmed about what an an attack on Iran would do to the oil supply and the US economy, and to the overstretched US military in the unstable Middle East and elsewhere, which caused the Bush administration to draw back.
Sanctions, it would seem, can be effective against small nations but are largely empty threats against large nations like China precisely because of the economic interdependence you cite. The effect of sanctions against a middle power like Iran probably falls between these two poles.