Report: Trump considering allowing a $15 billion bailout of Iran

Another day, another suspiciously damaging leak involving Iran policy in the post-Bolton era.

Remember the Republican uproar about “pallets of cash” being shipped to Iran under the Obama nuclear deal? Trump himself frequently brings that up when criticizing the deal. He’s totally right that Iran got big bucks in return for agreeing to Obama’s terms, although the money in question was actually Iran’s to begin with. Most of it consisted of Iranian assets abroad that had been frozen while U.S. sanctions were in place; once the sanctions were lifted, the cash was finally transferred. But Trump’s point stands: What the hell was O doing greenlighting a massive economic windfall for the mullahs as part of a nuclear bargain that did nothing more in the end than temporarily suspend Iran’s uranium enrichment program?

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So here we are a few years later and Trump is reportedly considering doing the same thing. Once again money owed to Iran (for oil) is frozen due to an America’s “maximum pressure” sanctions campaign. And once again, in the interest of diplomacy, the president is weighing whether to let money be released to the mullahs. Not even as part of a deal in this case — as a goodwill gesture to simply get the two sides to the table so that they can discuss a deal. Said one critic last night on Twitter, “It’s like we’re running an experiment to see if grassroots Republicans would’ve supported the Obama presidency if only he were an old vulgar Manhattan elite.”

The $15 billion in this case would consist of a line of credit brokered by France. It’s not the same as O’s deal in all particulars, in other words — sanctions aren’t being lifted but rather an exception to them is being made. Iranian assets aren’t being unfrozen but cash is being made available. In both cases, though, Iran is being thrown an economic lifeline with America’s blessing in return for abiding by the terms of Obama’s nuclear deal.

The deal put forward by France would compensate Iran for oil sales disrupted by American sanctions. A large portion of Iran’s economy relies on cash from oil sales. Most of that money is frozen in bank accounts across the globe. The $15 billion credit line would be guaranteed by Iranian oil. In exchange for the cash, Iran would have to come back into compliance with the nuclear accord it signed with the world’s major powers in 2015. Tehran would also have to agree not to threaten the security of the Persian Gulf or to impede maritime navigation in the area. Lastly, Tehran would have to commit to regional Middle East talks in the future…

The French proposal would require the Trump administration to issue waivers on Iranian sanctions. That would be a major departure from the Trump administration’s so-called “maximum pressure” campaign to exact financial punishments on the regime in Tehran. Ironically, during his time in office, President Barack Obama followed a not-dissimilar approach to bring the Iranians to the negotiating table, throttling Iran’s economy with sanctions before pledging relief for talks. The negotiations resulted in the Iran nuke deal that President Trump called “rotten”—and pulled the U.S. out of during his first term…

Several sources told The Daily Beast that foreign officials are expecting Trump to either agree to cooperate on the French deal or to offer to ease some sanctions on Tehran.

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Bolton objected “vociferously” to the idea, the Daily Beast was told. (By whom, I wonder!) And who can blame him? As Josh Barro put it, “I don’t understand the point of withdrawing from the Iran deal and sanctioning Iran but then giving Iran financial aid to offset the effects of the sanctions in order to induce them to stay in the deal.” Does Trump want to cancel Obama’s deal and try to bring Iran to its knees with economic warfare or does he want to keep the deal in place and pull back on sanctions? His stick-and-carrot approach seems to be to beat the enemy with a stick and feed the enemy carrots at the same time.

Trump’s erratic Iran policy is swerving towards a reprise of Obama’s policy, notes Philip Klein, minus any overarching regional strategy:

At least in Obama’s case, it could be argued that the administration was consistent. They believed a policy of appeasing Iran would strengthen moderates, and reorient the Middle East, and they were hostile toward traditional U.S. allies in the region — the Arab states and Israel.

In Trump’s case, however, his Iran policy is all over the place. He decided to pull out of the Iran deal, but then short arm the “maximum pressure” campaign, and now wants to offer concessions in exchange for a meeting that would be a diplomatic coup for Iran without doing anything to advance U.S. interests. It’s unclear why Trump wanted to pull out of the deal in the first place if this is how he followed through.

If Trump thinks Obama’s nuclear deal is so terrible, Klein argues, the last thing he should want to do is keep its terms viable diplomatically. That’ll make it easy for a Democratic successor to recommit to it. Yet that’s exactly what he’s doing by dangling sanctions relief, whether in the form of France’s credit line or outright suspension of sanctions by the U.S., in exchange for Iran agreeing to reimplement O’s deal and sit down for talks with him and Mike Pompeo. He was asked yesterday by reporters whether he might ease sanctions on Iran, in fact, and didn’t rule it out. Meanwhile, Iran’s president has been adamant that he won’t talk to Trump unless and until sanctions are softened as a precondition. Iran’s driving a hard bargain and POTUS seems inclined to take it. The most you can say for Macron’s idea about a line of credit is that it would let Trump save face — a little — by putting some money in Iran’s hands ahead of talks without requiring the U.S. to make a major concession, like formally suspending sanctions. But again, the effect is the same. Pressure on Iran will be reduced. The Obama nuclear deal will be revived. Perhaps temporarily. Perhaps not.

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I think this is what we’re in for on foreign policy generally over the next year. When Trump took office he was eager to show he was a tough guy. He bombed Assad; he threatened Kim Jong Un with “fire and fury;” he tore up Obama’s nuclear deal; he declared trade war on China. In each case he hoped the enemy would respond with capitulation. In each case it didn’t, so he’s in dealmaker mode now. He’s had two summits with his new friend Kim and is all but begging Iran to give him another. As economic forecasts turn darker ahead of the election, he’ll be frantic to make a deal with China that ends the tariff pain. If he can’t get a “win” playing hardball, he’s prepared to switch to softball — even if that means luring Iran back towards the term of the Obama accords that he supposedly despises.

But maybe it doesn’t matter. Aaron Kliegman is right that the recent standoff between Trump and Iran is really just the natural end of Obama’s agreement with the mullahs except on a sped-up timetable. The deal by its own terms was set to lapse in the next decade, freeing Iran to return to aggressive uranium enrichment and forcing western powers into a new conundrum about what to do about it. Well, that’s what’s happening now. Obama endorsed this crisis. He just didn’t expect his successor would be dealing with it.

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David Strom 3:20 PM | November 15, 2024
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David Strom 12:40 PM | November 15, 2024
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