Watch for these trade frictions as Air Force One touches down in Asia
Donald Trump’s primary mission as he prepares to venture into Asia, is to go forth, identify trade imbalances wherever they can be found, and put the world to rights by correcting those imbalances in the US’s favour
Scratch the surface of Donald Trump’s decision last month to renege on the Iran Nuclear Deal that in 2016 ended decades of sanctions, and what do you find? Pistachio nuts.
So often, high-minded, big-headline global deals have humble, not-so-high-minded foundations, and the Iran nuclear deal provides a superb, if nutty, example.
For thousands of years – back to 6,500 BC at least – Iran has been the world’s crucible for pistachio nuts. Not only do Iranians devour them with a passion, at almost every festive opportunity, but anyone anywhere in the world that had heard about, and developed a taste for pistachios, had to turn to Iran. Even through the past century, after crude oil, Iran’s main export has always been pistachios, coming mainly from the south-eastern province of Kerman, famous also for caraway seeds and Iran’s not so awesome auto industry.
Legend has it that the Queen of Sheba decreed that pistachios were for royals only. Nebuchadnezzar, the king of ancient Babylon, is said to have planted pistachio trees in his hanging gardens. And in the first century A.D., the Roman emperor Vitellius introduced the pistachio to Rome. Muslim legends say that the pistachio nut was one of the foods brought to Earth by Adam. Only two nuts get mentioned in the Old Testament – pistachios and almonds. But for most of recent history, it is Iran that has taken ownership worldwide of the pistachio.
Until 1979 and the Iran hostage crisis, that is. For those of you too young to remember, soon after the overthrow of the Shah of Iran and his exile to the US, radical Muslim students took over the US embassy in Tehran and held 52 American diplomats and citizens hostage for 444 days – the longest hostage crisis in recorded history. The crisis cemented the prestige of Ayatollah Ruhollah Khomeini and the political power of Iran’s theocracy, and pushed US President James Carter to impose sanctions against Iran.
Thus began four decades of ugly stand-off between the US and Iran, and an awful body-blow to Kerman’s venerable pistachio trade. Exports of pistachios were never formally banned to Europe or China (two key markets for Iran’s farmers), and even the US never imposed formal embargoes on them. But the clamp on access to banks and US dollar finance, and to most international shipping, hobbled the trade.
And guess who strode into the gap vacated by Iran’s pistachio exporters? Of course, California’s nut farmers. Not satisfied to dominate the world trade in almonds and walnuts, the opportunity to fill the pistachio breach was undoubtedly welcome. Pistachios only arrived in the US in the 1880s, and even in the 1970s attracted very little interest.