SINGAPORE (Dec 10): Secondary sanctions imposed by the US on countries that do not support US policy are ironically speeding up the rollout of China’s Belt and Road Initiative.

The US has imposed unilateral sanctions on Iran. These sanctions have also spread to European companies which, in compliance with UN resolutions, are trading with Iran. The US has threatened to impose punitive secondary sanctions on European companies by refusing to allow trade settlement in US dollars via US co-respondent banks. This is a threat to lock them out of the US dollar-driven financial system.

This has accelerated plans to reduce the dependency on the US dollar as a trade settlement or, indeed, an investment currency. Plans to reduce European Union dependence on the US dollar were revealed on Dec 5 by the European Commission.

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