KW: The U.S. has practiced financial warfare for decades, as the dollar is the world’s reserve currency. Its tools include account seizures and freezes, expulsion from global payment systems, fines and penalties on banks that do business with targeted entities, embargoes, tariffs, and more.
Iraq is the latest country to feel the sting of U.S. dollar sanctions. Following the killing of senior Iranian military official Qasem Soleimani on Iraqi soil, Iraq threatened to expel all U.S. troops. Trump answered that U.S. troops would not leave until Iraq repaid the U.S. for building bases and other infrastructure. Trump also warned the U.S. could terminate Iraq’s access to its account at the New York Fed, making it impossible for Iraq to purchase and sell oil in dollars. Iraq heard the U.S. threats loud and clear in the face of the terroist actions of the Trump administration