How to navigate America's new extraterritorial sanctions targeting Iran has become an important diplomatic test for Japan and a number of other important democracies concerned about U.S. President Donald Trump's pursuit of aggressive unilateralism. Many of these countries have already taken an economic hit, in the form of higher oil-import bills, from Trump's unilateral pullout from the multilateral nuclear deal with Iran.
The United States has also imposed extraterritorial sanctions to punish the Kremlin for its alleged interference in the 2016 U.S. presidential election. The new Countering America's Adversaries Through Sanctions Act, or CAASTA, which came into effect on Jan. 29, seeks to stop other countries from making "significant" defense transactions with Russia, a leading arms exporter.
However, with Trump seeking a nuclear deal with North Korea, much of the weight of America's punitive approach is likely to fall on Iran. Trump, whose main aim is to topple the Iranian regime, said ominously on June 1, "You are going to see how powerful the sanctions are when it comes to Iran."