The decision against granting China an exemption from the US sanctions that are set to be put in place against importers of Iranian oil seems at first glance to be nothing less than insane.
These sanctions, authorized by the National Defense Authorization Act (NDAA) for the fiscal year 2012, are targeted at nations that continue to import Iranian oil and have not satisfied the US government that they have taken steps to reduce their importation of that oil.
That is of course, a demand offensive to many nations. In fact, the NDAA essentially extends US sovereignty to every nation named in it. It essentially informs China that it will be the US, not China, that will determine when and how Chinese financial institutions may spend their currency.
Even ignoring the West's long and disgraceful history of imposing controls upon China's economy, this is an indefensible infringement upon China's economic sovereignty.
Even nations that have been granted waivers, such as India, have been less than grateful for US largesse. India has described the act as something that has taken place under the domestic law of the US. It is plain here that the Indian government does not wish to be seen as bowing to US demands by its own citizens.
It is equally unlikely that the Chinese government wants to be seen as surrendering to these US demands. Such an action would certainly infuriate Chinese public opinion in the short-term, and make further diplomatic work with the US more difficult in the long term.
Ironically, this could reduce China's ability to work to convince Iran that greater transparency and cooperation would be in that nation's self-interest.
Besides, the financial consequences of any sanctions would be devastating for both the US and China. At the very least, it would lead to drastically increased uncertainty in the financial markets. This would be especially true given the probability that China would retaliate against US financial institutions.
The most extreme result might be a general breakdown of commerce between the two nations. In the worst case scenario, such an event might plunge the world back into a recession or even a full-scale depression.
However, both US President Barack Obama and Secretary of State Hillary Clinton are well aware of these potential consequences. Why then, have they taken this action? The likely answer is that they have no intention of actually attempting to sanction China. In fact, the reason for this action is more likely bound up in domestic US politics rather than any questions about Iran or China.
Obama is facing a tough election and many of his opponents have attempted to use the "China issue" as a tool against him. By failing to grant China a waiver, Obama avoids granting his opponents a weapon in the general election.
More importantly, he has the authority under the act to postpone any sanctions until after the election. At that point, he can either negotiate from a position of strength as a re-elected president, or leave the issue to his Republican successor.
In other words, the administration's decision to avoid granting the waiver is not a threat of further sanctions, but a tool to deflect potential domestic criticism.
However, this does not reduce the potential harm of the sanctions issue in terms of the Sino-US relationship.
The first issue is the simplest one. Empty threat or not, these sanctions are still a threat to China's domestic economy and the right of its government to conduct foreign policy as it desires. We must be plain that China is conducting its trade with Iran in full compliance with UN resolutions and international law alike. It is the US that is seeking to unilaterally impose its own controls on a sovereign nation.
In addition to its short-term impact, this course of action will lead to a world environment in which nations are less willing to cooperate with the US, especially if they feel that they are being coerced into doing so. This will in turn make arriving at multilateral solutions to world issues even more difficult then they are currently.
Iran is not, contrary to US claims, an imminent threat to the world. In fact, US threats against the sovereign rights of China and other nations to conduct their commerce as they see fit poses a greater threat to the stability of the world order.
It is US, not Iran, that risks permanently crippling the use of effective multilateral approaches to world issues.
The author is a freelance writer based in Corona, California. firstname.lastname@example.org