Consequences of U.S. Sanctions; Iran's Carpet Industry Worried About Losing Global Markets

Under the impact of U.S. sanctions, carpet producers in Iran are deeply concerned about losing their markets worldwide. The Associated Press reports from Kashan that before the resumption of sanctions against Iran this year, the volume of Iran's carpet industry was approximately $425 million annually, which not only preserved an ancient tradition and trade but also provided income for many Iranian merchants and producers as well as a large number of Afghan workers in this field. Iran's carpet production volume is about 400 tons annually, 80% of which is exported, and despite nearly four decades of hostility between Iran and the U.S., at least a quarter of Iran's carpets are exported to the U.S. However, due to the resumption of sanctions, which the U.S. claims are the most severe in history, this situation will change, and it can already be observed in the large market of Kashan, one of the main carpet-producing cities. One of the consequences of the sanctions is that the few foreign tourists who travel to Iran cannot use their credit cards due to banking restrictions. Fabien Simon, a French tourist, says, "If I could pay with my credit card, I would definitely buy more. I brought some cash with me, and when it runs out, I have no way to buy anymore." Mahmoud Morshedi, a carpet merchant with over four decades of experience in this trade, says that the handmade carpet industry has been damaged for years due to the expansion of machine-made carpets. The number of carpets his company produces annually has now decreased to 20, whereas in the 1970s, due to high demand for local and foreign markets, it was at least 100. Iran cannot directly export any goods to the U.S., and merchants can only reach the U.S. market through third countries if they can conceal the original source of the goods. Javad Isfahaniyan, whose family owns one of the oldest carpet workshops in Iran, says the only reason this industry survives is the use of cheap labor from Afghan refugees, most of whom are women, earning about $1.5 a day. He estimates that about two million people work in the carpet industry, and a total of about eight million people depend on this income. However, due to the worsening economic situation in Iran, many Afghan refugees and migrants are returning to their home country. According to United Nations statistics, about 350,000 of them have returned to Afghanistan in the past six months. Javad Isfahaniyan says, "I am sure that if Afghan weavers leave Iran, the handmade carpet industry in Iran will be destroyed." Mohammad Isfahaniyan, Javad's 86-year-old cousin and head of the Kashan Carpet Producers Association, holds the Iranian government leaders responsible for this situation. He says, "When you curse other countries, they will become your enemies." He adds, "Politics and economics are not separate. For example, if 10 shops sell a product, from which one will you buy? Certainly from the shop with which you have better relations and whose behavior is better than the others." Despite repeated reports from the International Atomic Energy Agency confirming Iran's adherence to its commitments under the JCPOA and the emphasis of other global powers that signed this agreement on maintaining it, the Trump administration believes that the JCPOA is a bad deal because it has failed to stop Iran's interventions in regional countries and its missile programs. In this context, the halt of Iran's exports to the U.S., the increase in imports from the U.S., and the fact that the U.S. exported more goods to Iran in August than in the entire previous year are significant. Iran is suing the U.S. over carpet sanctions, and its negative trade balance with the U.S. has increased, leading to a significant decrease in trade between Iran and the U.S., with a 43% drop in bilateral trade.