Can Washington really cut Iran off from the global economy?

**Bisi Adebayo** (0:01)
Can Washington really cut Iran off from the global economy? It's World Business Express from the BBC World Service. I am Bisi Adebayo. So, what could it mean for Iran's major trading partners? Also, India takes emergency action as the price of onion saws.
The US says its latest sanctions are designed to isolate Iran from the global economy, but doing that could have consequences far beyond Iran itself, while some of Tehran's biggest trading partners rely on it for oil and gas, while others sell billions of dollars worth of food, machinery, and other goods into the country. Washington is now threatening penalties, secondary sanctions against businesses that continue those relationships. Nasser Saidi is an economist and former Lebanese economic minister.

**Nasser Saidi** (0:56)
If you take the major trade partner and that is China, okay, this is the biggest buyer of Iranian oil, it is highly unlikely that China will comply. There is no way in my view that they will comply with US sanctions and increased threats. Iran has open borders with Iraq and many countries to the West, Asian countries. So although you might restrict maritime trade, much more difficult to restrict border and land trade.

**Bisi Adebayo** (1:27)
What do they import or export from one another?

**Nasser Saidi** (1:30)
Well, if you look at India, a lot of it is rice and related products, mainly agricultural products. So it's one of the biggest trade partners for Iran, particularly on those goods, as well as goods that are exempted on humanitarian grounds. China, as I mentioned, is much less because I don't think they will abide with the sanctions. So I think that trade, including financial relations, will continue.
In terms of Turkey, mainly a lot of the Turkish exports to Iran are a variety of goods. A lot of them are consumption goods. And the other side of it is they import a lot of natural gas. And that's a notable source for Turkey.

**Bisi Adebayo** (2:22)
And what will be the knock on effects on the global economy then?

**Nasser Saidi** (2:26)
I think the global effect has to do with how credible will trade policies remain. I mean, can you operate an international trade system with always being shocked by sanctions and restrictions on trade?

**Bisi Adebayo** (2:41)
Not society there. Well, Canada is preparing to announce new measures to support its businesses and workers as its trade war with the US escalates. President Trump plans to hike US tariffs on Canadian car and truck imports to 50% from January. Well, what could it mean for the motor industry? I had a chat with Greg Mordeaux from McMaster University and he spent more than 20 years working at Toyota Canada.

**Greg Mordeaux** (3:07)
It's caused all kinds of challenges.
For example, there are five automakers that build vehicles and have assembly plants in Canada. Largely Detroit based companies from the Canadian perspective, including General Motors, Stellantis and Ford and two Japanese owned companies, Toyota and Honda.

**Bisi Adebayo** (3:26)
The Prime Minister Mark Carney says that Canada will retaliate. But when 70% of Canadian exports go to the United States, you then ask or you wonder, how much leverage does Canada really have in this fight?

**Greg Mordeaux** (3:42)
From the automotive industry's perspective, because the industry is integrated, we are shipping a large proportion of our vehicles into the US. But by the same time, we're importing in Canada, more vehicles from the US than we export.
And so, it's an integrated industry. But if you take a broader view and look at Canada, not simply as a production platform, but an export destination as well, if you're US, then you can see there's a much greater trade parity.

**Bisi Adebayo** (4:17)
And how easy is it to then diversify into other markets?

**Greg Mordeaux** (4:21)
Well, that's a very interesting question, because this is exactly what, this may be the unintended consequences of the US administration's approach. Because what ultimately may happen or should happen is that Canada will develop greater relations with other jurisdictions where they don't currently export. And those other jurisdictions may develop deeper relations in places where they haven't had them previously.

**Bisi Adebayo** (4:51)
Greg Marduo, Associate Professor at McMaster University.
Lego says World Cup and Formula One sets have boosted sales. They have gone up 21% in the first half of the year. The world's largest toy group has introduced more sets aimed at adults, with tie-ups ranging from Pokémon to K-pop. But higher oil prices are making the plastic used in Lego bricks more expensive. CEO Niels Christiansen has been stalking to the BBC.

**Niels Christiansen** (5:20)
We're being impacted on the raw materials we buy, also to some degree on freight costs around the world.