Trump puts Iraq in a bind over Iran

As we reported this week, a dispute over Turkey’s continued detention of an American clergyman has spiraled into the worst crisis between the two countries in more than four decades. President Trump has exultantly slapped tariffs on Turkish imports, an act that sent the country’s currency into a tailspin over the weekend. Now Turkey has retaliated, announcing on Wednesday that it would levy its own tariffs on a slate of U.S. products.

The increasingly nasty fight between two NATO allies is bad enough, but a potentially bigger crisis looms in neighboring Iraq, which is feeling the effects of Trump’s attempts to squeeze Iran.

Iraqi Prime Minister Haider al-Abadi reluctantly admitted last week that Iraq had no choice but to abide by the terms of renewed sanctions imposed on Iran by the Trump administration. Reports suggest that the United States would sanction any Iraqi bank that runs afoul of American prohibitions on doing business with the Islamic Republic.

“We don’t sympathize with the sanctions, we don’t think they are appropriate … but we are committed to protect our people,” Abadi said.

But a two-pronged backlash — not only were some Iraqis angered, but the Iranians apparently canceled a meeting with the Iraqi prime minister scheduled for this week — prompted Abadi to change tack.

“On Monday, Abadi walked back his earlier commitment, saying Iraq would refrain only from conducting business with Iran in U.S. dollars,” explained my colleagues Tamer El-Ghobashy and Mustafa Salim. “He said there was no decision yet on whether Iraq would suspend imports of major goods from Iran. In a concession to his powerful neighbor, Abadi said visa fees for Iranian pilgrims to Shiite holy sites in Iraq would be reduced to compensate for the weakened value of the Iranian rial.”

Abadi is at the helm of a caretaker government, with Iraqi politicians still grappling over the makeup of a new ruling coalition for the country. He is in an unenviably delicate position: Though he is liked in Washington, he is also beholden to Iran’s interests and influence inside his country and its constellation of political parties. He can afford neither a rupture with the United States, a critical security partner, nor a real fight with Tehran, with which it does some $12 billion worth of annual trade and shares myriad other connections.

Things may get even trickier in November, when a tougher round of U.S. sanctions on Iran’s oil industry is slated to take effect. Nabil Jafar, a professor of economics at the University of Basra, told Al-Monitor that Iraq might “be denied exporting its oil” if Baghdad doesn’t comply with those measures.

But Genevieve Abdo, a resident scholar of the Arabia Foundation in Washington, argued in Politico that Iraq has no choice but to violate the sanctions. If Iraq adhered to the Trump administration’s demands, Iran could cut off desperately needed resources to its neighbor. Iraq’s chronic electricity shortages would become exponentially worse if its supplies of Iranian natural gas dried up; its droughts would be far more severe if Iran diverted flows of water into away from rivers.

Iraq relies on its eastern neighbor for everything from gas supplies to electricity to water and foodstuffs,” wrote Abdo, before putting her finger on the irony of the moment. “Not only is Iraq in a no-win position, but it is the United States, which still maintains some 5,200 troops in Iraq, that put it there: The country’s dependence on Iranian trade and public services is largely due to the U.S. invasion in 2003.”

For Trump and his allies, though, that’s Iraq’s problem. The White House is bent on pushing back Iranian influence across the Middle East and hobbling the theocratic regime in Tehran. Critics argue it’s an overzealous mission that both obscures potential avenues for cooperation — not least in Iraq, where both Iran and the United States worked to defeat the Islamic State — and overstates the scale of the Iranian threat. Tehran’s military budget is smaller than those of Israel, the United Arab Emirates and Saudi Arabia — three traditional U.S. allies in the region who are vehement foes of Iran.

“The United States’ treatment of Iran as a serious strategic competitor is deeply illogical,” wrote Steve Simon and Jonathan Stevenson, former Obama administration officials, in Foreign Affairs. “ Iran imperils no core U.S. interests. It refrains from attacking U.S. forces or using terrorism to target U.S. assets or territory, co-exists with the United States in Iraq with little friction, and has agreed to limits on its nuclear program. Tehran scarcely reacts to Israeli strikes on its assets in Syria, where it maintains only a small forward-deployed force supplemented by ragtag Afghan, Iraqi, and Syrian Shiite militias.”

Meanwhile, ordinary people are suffering while foreign powers play their games. The precipitous decline of the Iranian rial, sparked by Trump’s unraveling of the nuclear deal, has had unintended consequences in countries nearby. Tens of thousands of Afghan migrant workers have left Iran over the past year as the economy tanked; a recent report by Radio Liberty warned that their departure (and a drop in remittances sent home to impoverished Afghan families) could have ruinous consequences for Iran’s western neighbor and could even fuel militancy.

And as my colleagues reported, countless Iraqis who had invested their savings in schemes offered by Iranian banks are seeing their money rapidly dwindle. These investments were mostly made a few years ago, when the situation across the border seemed far more stable than in Iraq, where the Islamic State was overrunning whole cities.

Now, what seemed a safer bet has turned into a new source of misery. Hussain al-Kaabi, a 41-year-old real estate investor who spoke to my colleagues, estimated that the current turmoil has set him back a decade.

“The Americans have never done anything good in the Middle East,” Kaabi told The Post. “Everything they do damages us, whether militarily, politically or financially.”

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