On Tuesday, President Trump dealt a death blow to the Iran deal.
In a White House speech, the president announced plans to effectively withdraw from the deal by reimposing steep sanctions on the country. That decision puts the United States at odds with almost all its key allies. It may also increase tension with China and Russia.
U.S. allies had been pressuring Trump to stay the course on the 2015 deal.
“I don't think that anybody has produced a better alternative to the JCPOA as a way of preventing the Iranians from going ahead with the acquisition of a military nuclear capability,” British Foreign Secretary Boris Johnson said after a meeting earlier this year with the Iranian foreign minister, referring to the nuclear deal by the abbreviation of its formal title — the Joint Comprehensive Plan of Action. “It is incumbent on those who oppose the JCPOA to come up with that better solution, because we have not seen it so far.”
What is the Iran deal?
The JCPOA is the result of several tough years of negotiating. Iran accepted tight restrictions on its nuclear activities, notably its uranium-enrichment operations, and agreed to allow U.N. inspectors to keep close tabs on its nuclear program. In exchange, the world's major powers — the United States, Britain, Germany, France, Russia and China — agreed to lift all nuclear-related economic sanctions on Iran. This was important to Iran, since the sanctions had effectively crippled its economy.
Why does Trump want to ditch the Iran deal?
By all accounts, Iran has complied with the terms of the deal. U.S. officials have said so; European allies have agreed. The United Nations watchdog tasked with monitoring compliance has visited Iran several times and certified that the country is limiting its nuclear activities, per the terms of the deal.
But the president and his administration say Iran is not following the spirit of the accord, which they see as de facto noncompliance. Administration officials have said Iran has not positively contributed to regional and international peace and security, an “expectation” embedded in the deal's preamble. They note that Iran still supports militant groups such as Hezbollah and Hamas, and backs militias in Syria and Yemen. Iran has also continued to test ballistic missiles, something that irks the United States, even though such tests do not constitute a violation of the agreement.
Trump already “decertified” the deal. How is his Tuesday announcement different?
On Tuesday, Trump announced that he is reimposing sanctions on major Iranian institutions, such as the country's central bank. In effect, he pulled the United States out of the accord, which has threatened to do since his presidential campaign. “When I make promises, I keep them,” he said Tuesday.
What is Europe's position?
All of the other signatories have indicated their strong and continued support of the Iran deal. The U.N. watchdog monitoring compliance says that it is working. “We will not follow the United States in reneging on our international obligations with this deal,” a European Union official told The Post recently. Russian Foreign Minister Sergei Lavrov told reporters, “It is very important to preserve it in its current form, and, of course, the participation of the United States will be a very significant factor in this regard.”
Trump's decision to back out of the deal will probably isolate the United States from its allies and weaken its stature abroad. As my colleagues reported:
More than any other issue that has threatened transatlantic cohesion this year, President Trump’s decision to decertify Iranian compliance with the nuclear deal could start a chain of events that would sharply divide the United States from its closest traditional allies in the world. “After the Paris climate decision,” in which Trump withdrew the United States from a widely supported, painfully negotiated accord, “this could push multilateralism to the breaking point,” said a senior official from one of the three European signatories to the Iran deal.
Will the deal survive, now that the United States is pulling back?
It's hard to say. Iranian officials have said that if the United States pulls out, the deal is dead. Iran has said it could reactivate suspended elements of its nuclear program if sanctions are reimposed. On Monday, Iranian President Hassan Rouhani told attendees at a petroleum conference that if the United States left the deal, Iran “will face some problems for two or three months, but we will pass through this.” Iran will keep “working with the world and constructive engagement with the world,” he said.
How will the business community respond?
Since the deal was signed in 2015, several big companies have begun to do business in Iran. New sanctions by the United States would make things significantly more difficult. As Vox explained:
New sanctions would also force American allies to choose between doing business with Iran or with the U.S. Iran has begun to reintegrate itself into the global economy in the past year, and it has developed meaningful business ties with big companies that are based in the countries that struck the Iran deal. For example, this summer Iran signed a $5 billion agreement with France’s Total SA and China’s state-run China National Petroleum Corporation to develop its South Pars natural gas field.
Already, the European Union has begun taking steps to protect its businesses from U.S. retaliation. Officials are looking at measures used in the 1990s to shield companies and individuals from secondary U.S. sanctions. U.S. sanctions may even make it easier for European companies to compete in Iran. “U.S. decertification would not necessarily end the deal — the U.S. just wouldn't be part of it anymore,” Robert Litwak, a member of the National Security Council under President Bill Clinton and an expert on international security at the Woodrow Wilson Center, told CNBC. “The Europeans won't return to sanctions so quickly. If this enables Airbus to beat out Boeing, they'd be delighted.”
But it may not be enough. On rumors of Trump's decision, countries began to reduce their purchases of Iranian oil.