Iran: What Comes Next?

On May 8, President Donald Trump took perhaps the most consequential foreign policy action of his presidency thus far and announced that the United States would be withdrawing from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal. Despite the fact that Iran has verifiably been compliant with the terms of the agreement, President Trump has repeatedly characterized it as a “bad deal” and the promise to withdraw the United States from it was a central pillar of his campaign. Although it fulfills the President’s campaign promise, American withdrawal from the JCPOA is comprising international security, regional stability, and the United States’ role in the international arena.  

European allies including France and Germany had spent the past several months working to convince the administration to stay a part of the deal and have made their displeasure with this development clear, indicating that they will do what they can to save the deal without the United States. This is no small task and many European diplomats have admitted that it would be exceedingly difficult. The EU does have the option of imposing retaliatory sanctions to shield European businesses or having the European Central Bank invest directly in Iran, although given the strength and pervasiveness of the American financial system it is unlikely that this would be enough to maintain the deal’s benefits for Iran. Regardless a signal has been sent to our European partners that they cannot rely on the United States to display the international leadership they once did.

If and when it becomes clear that Iran will not achieve the economic benefits that the deal promised it is highly probable that they will resume their nuclear program. Hardliners within Iran will take this opportunity to make the case that diplomacy is futile and future agreements will become increasingly difficult. At the same time, the country’s more moderate President, Hassan Rouhani, will likely see his influence weakened. As the Iranian economy, which has already been suffering from unrelated US sanctions, continues to get worse, it is average Iranian citizens who will bear the brunt of the sanctions. This could lead to a degree of social unrest, although any protests are likely to get cracked down upon early and hard.

If Iran does reinstate its nuclear program it will be much harder to once again put together the international sanctions regime that brought Iran to the negotiating table to begin with. Sanctions against the Iranian regime were effective when the international community worked as a united front. Unilateral US sanctions are likely to have a substantially smaller impact on the regime’s actions. Many of the most effective US sanctions, known as “secondary sanctions” or sanctions, levied not on the Iranian regime directly but on parties doing business with Iran. The reimposition of these sanctions is likely to have the greatest impact as they will act as a significant deterrent to European businesses who were quick to begin doing business in the country after the sanctions were lifted. It will also impact American firms, such as Boeing which had a large deal in place to supply airplane parts to Iran’s civil airline.  

What will most likely happen?

The US sanctions will be enough to prevent Iran from getting the benefits of the nuclear deal, thereby causing the deal to fall apart, but not enough to curb its activities in the region.

Refusing to stick to the accords doesn’t just increase the likelihood that Iran will end up with a nuclear weapon in the near term, it also sets a bad precedent and undermines faith in the United States with regards to future international negotiations. This is especially pertinent considering the upcoming summit with North Korea. The deal that is reportedly being offered to Kim Jong-Un, economic relief in exchange for the cessation of the country’s nuclear program, is similar to the one that the Trump administration is now reneging on with Iran. If the US has proven itself unable to stick to a deal once agreed upon with Iran, why would the North Koreans expect to be treated any differently?

Regardless of what one thinks of the administration’s withdrawal from the deal, it happened. The question now is what’s next?

At the end of his speech announcing the American withdrawal, President Trump expressed a willingness to renegotiate the deal. There is however little indication of what the administration would hope to gain by doing so. In fact, the administration seems to have no clear strategy on the issue. The vague normative statements, half-truths, and political chest-thumping that have characterized the President’s comments on the issue are not enough. If regional and international security is to be maintained, it is essential that the administration has a clear strategy for how to handle Iran in both the near and long-term.