Trump decision to nix not fix Iran deal adds to transatlantic tensions

Trump decision to nix not fix Iran deal adds to transatlantic tensions

In a landmark foreign policy decision, Donald Trump announced on Tuesday that he will not recertify the Iran nuclear deal. However, he was immediately contradicted by Emmanuel Macron, Theresa May and Angela Merkel, who declared their nations would not merely remain signatories to the agreement, but would also work “collectively on a broader framework” with Tehran in 2018 and beyond.
Indeed, it is the clash between the United States and the EU on this issue that is most striking, setting the scene for significant transatlantic tensions in the coming weeks, not least with separate bilateral battles over trade issues also in the offing. 
Of course, deep US-European discord over Tehran is not unprecedented as, in the 1990s, significant disagreements surfaced when Washington adopted legislation — including the Iran and Libya Sanctions Act — which punished European firms for doing business in those countries. In response, Brussels agreed reciprocal steps to protect European businesses and adopt counter-measures against the US where restrictions were imposed by Washington.
A similar pattern may now play out following Trump’s decision. It is clear the US president feels strongly about the Iran issue, saying that the agreement is “a great embarrassment” and “a giant fiction,” given that “we cannot prevent an Iranian nuclear bomb under the decaying, rotten structure of the current agreement.”

Aside from Trump’s concern that Tehran could still get an atomic weapon under the deal, he has also repeatedly flagged Tehran’s misbehavior that is not addressed by the 2015 deal, including the ongoing development of ballistic missiles and interventions in Arab countries like Iraq, Syria and Yemen. On all these points, the president has the strong support of several Middle Eastern countries, including Israel and Saudi Arabia, who welcomed Tuesday’s announcement. 

Even in the two days since Trump's announcement, the list of grievances the White House has asserted against Iran has been added to by the latter's rocket attacks from Syria on Israeli army bases in the Golan Heights, and Washington has issued a strong statement of support for Israel's right to act in self-defense. The latest Iranian offensive and Israeli retaliation has raised fears of further Middle Eastern destabilization and possible conflict. Syrian President Bashar Assad has said the current situation is "something more than a Cold War" but not yet a "full-blown war."   

 

Following Trump’s decision, the ball is now in Europe’s court and the indications are that the continent’s leaders want to try and preserve the deal.

Andrew Hammond

Given Trump’s rhetoric, it appears unlikely he will row back from his decision, although Treasury Secretary Steven Mnuchin said on Tuesday that Washington “will continue to work with our allies to build an agreement that is truly in the best interest of our long-term national security.” The practical import of Trump’s announcement is that he will no longer renew the waiver on sanctions, which will now be re-imposed on key sectors, including energy and petrochemicals. This will not immediately lead to the imposition of sanctions. Instead, those companies doing business in Iran have a period of time to, potentially, wind down operations there.
Following Trump’s decision, the ball is now in Europe’s court and the indications are that the continent’s leaders want to try and preserve the deal. Iranian President Hassan Rouhani also said on Tuesday that Tehran might not pull out of the agreement if the other signatories (not just France, the UK and Germany but also China and Russia) remain committed to its terms. At the same time, however, he warned that he has instructed the country’s atomic energy agency to prepare to restart the enrichment of uranium in a few weeks’ time should the deal collapse entirely.

Not only does Europe want to make the deal work, but Macron again indicated that France, Germany and the UK “will work collectively on a broader framework, covering nuclear activity, the post-2025 period, ballistic activity, and stability in the Middle-East, notably Syria, Yemen, and Iraq” to try to address what many European leaders regard as Trump’s legitimate concerns in these areas — but by building on the 2015 accord, rather than ditching it.
Yet there is no doubting that European leaders are disheartened over Trump’s decision, which comes after high-level lobbying in Washington from Macron, Merkel and UK Foreign Secretary Boris Johnson in recent weeks. While Merkel and Johnson made no apparent headway, there were signs when Macron met Trump of potential compromise. 
While EU decision-makers have been reluctant to be too explicit in public on this issue, many have been scenario planning for weeks. Former UK Foreign Secretary Jack Straw has argued that it will be possible for the continent to continue to trade with Iran by blocking any US sanctions on European firms that do business with Tehran.
Despite this precedent, the re-imposed US sanctions could yet critically undermine European attempts to preserve the Iran agreement. For instance, it may only be European firms with little or no economic interest in the US that prove likely to want to trade with Iran given the potential risks of doing so, including fines from the US Treasury. 
Taken overall, transatlantic tensions will now jump again following Trump’s decision over Tehran and this could make for a tricky G7 summit next month. While Europe will seek to preserve the agreement with Tehran, its future is precarious. 

• Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics.

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