In April 1980 Secretary of State Cyrus Vance and Brzezinski announced that there was ‘no fundamental incompatibility of interests between the United States and Iraq’. They then recommended the sale of eight General Electric engines to Italy for use in the manufacture of frigates destined for Iraq. Despite early awareness in Washington of tensions between Iraq and its revolutionary neighbour, and recognition of ‘the outbreak of war as a distinct possibility’, the State Department approved this sale in August 1980 while also announcing the consideration of the sale of five Boeing Commercial jets to Iraq.
Though the latter deal was later cancelled as a result of Congressional pressure, these moves undoubtedly contributed to confidence in Baghdad that a military attack on its revolutionary neighbour would not incur a heavy-handed international response. It appears that though officials in Washington considered that public support of Iraq would have been imprudent, the war was thought initially to contribute to the pressures on Iran to resolve the hostage crisis.
As a Congressional brief suggested: Iraq is currently seeking diverse, independent relations with both East and West. ... Iraq’s edging away from the Soviet Union and Iraq–Iran tensions may provide new opportunities for increased contact between Iraq and the United States, although public support for Iraq’s struggle against Iran could be imprudent and could jeopardise the hostages’ safety.
All in all, the policies of the United States towards the Islamic Republic during this period were conditioned by the hostage crisis, though clearly other objectives were also pursued, to varying degrees of success. Apart from the loss of future Iranian trade and investment, the interests of US private corporations were largely unscathed. The Carter Doctrine laid the foundations for a greater US presence in the region and the guarantee of the flow of oil essential to the reproduction of the capitalist system. On the other hand, the beginnings of a rapprochement with the Iraqi regime served, at the very least, to embolden Baghdad to invade its revolutionary neighbour.