U.S. rejection of the nuclear deal with Iran would compel international community to develop alternatives to U.S. dominated financial system, limiting U.S. sanctions options in the future
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Perhaps the greatest long-term damage would be to the U.S. economy and financial system. Even as the international sanctions regime collapses, the United States – due to its privileged place in the international financial system – would still be able to have a significant effect with the sanctions it maintains against Iran. This would also affect the business of other nations looking to reinvest in Iran. Previous iterations of U.S. sanctions against Iran implemented without international consensus prompted severe trade disputes with Europe, and should the United States enforce unilateral sanctions against foreign businesses again, it could prompt a shift away from the U.S.-dominated order.27 “If the robust secondary sanctions contained in U.S. law were applied in defiance of international consensus, there would surely be a rush to develop robust financial instruments that would be beyond U.S. reach,” the Center for Strategic and International Studies’ Jon Alterman writes.28 U.S. unilateral sanctions would encourage international investment in parallel financial institutions that are insulated from the U.S. sanctions regime. Alterman suggests that China’s Asian Infrastructure Investment Bank “could be part of the architecture” of this new system. This shift would irrevocably undermine U.S. power for the foreseeable future: It would damage the U.S. economy and financial system by empowering a peer competitor and further diminish the effect and reach of U.S. sanctions, not only against Iran, but other nations, terrorist organizations, and criminal networks.