As expected, Donald Trump has reimposed the sanctions on Iran lifted under the 2015 deal with Tehran and several European allies, effective in 90 days. The action completes the withdrawal from the unsigned JCPOA and resets American-Iranian relations to the status quo ante. That, however, isn’t much of a change from the post-JCPOA status quo:
The Trump administration said it would restore sanctions on Iran that had been lifted under the 2015 nuclear accord at midnight on Monday, ratcheting up pressure on Tehran while worsening a divide with Europe.
The new sanctions are a consequence of President Trump’s decision in May to withdraw from the nuclear deal with world powers. Secretary of State Mike Pompeo said on Sunday that the goal was to get Iran to change its ways — including ending its support of brutal governments or uprisings in the Middle East. …
The new sanctions bar any transactions with Iran involving dollar bank notes, gold, precious metals, aluminum, steel, commercial passenger aircraft and coal, and they end imports into the United States of Iranian carpets and food stuffs.
They represent one of the few major foreign policy initiatives on which Mr. Trump and the rest of the administration and the Republican Party broadly agree.
“We’re very hopeful that we can find a way to move forward, but it’s going to require enormous change on the part of the Iranian regime,” Mr. Pompeo said on Sunday. “They’ve got to behave like a normal country. That’s the ask. It’s pretty simple.”
That point got made in harsher terms in the White House statement. Calling it a “horrible, one-sided deal” that “threw a lifeline of cash to a murderous dictatorship,” the White House statement also warned that the supposedly normative function of the JCPOA had failed even after the US made most of its concessions up front. Rather than act as a responsible member of the world community, the statement points out that Iran has become even more aggressive in exporting terrorism:
Since the deal was reached, Iran’s aggression has only increased. The regime has used the windfall of newly accessible funds it received under the JCPOA to build nuclear-capable missiles, fund terrorism, and fuel conflict across the Middle East and beyond.
To this day, Iran threatens the United States and our allies, undermines the international financial system, and supports terrorism and militant proxies around the world.
In other words, Iran hasn’t done much at all except ostensibly stop development of nuclear warheads — and even that’s only a guess, thanks to their refusal to allow inspections at key military facilities. They have, however, continued funding armed groups in Yemen, providing Bashar al-Assad with military support, as well as providing material support for Hezbollah and Hamas. They have also continued to develop their missile systems, including long-range weapons that put Israel and US interests at risk. They haven’t even released or accounted for all of the Americans held by their regime. It’s tough to say that the deal changed anything, except to the extent that it allowed the mullahs access to world markets and billions in frozen assets.
Trump pledged to enforce the sanctions aggressively, sending out a warning to Tehran and to the capitals of Europe alike:
All remaining United States nuclear-related sanctions will resume effective November 5, 2018. These include sanctions targeting Iran’s energy sector, including petroleum-related transactions, as well as transactions by foreign financial institutions with the Central Bank of Iran.
The United States is fully committed to enforcing all of our sanctions, and we will work closely with nations conducting business with Iran to ensure complete compliance. Individuals or entities that fail to wind down activities with Iran risk severe consequences.
Our allies bristled at the warning, ABC reports. Their plan is to penalize companies that refuse to do business with Iran:
The European Union on Monday said that new measures are ready to take effect to protect European businesses from the impact of U.S. sanctions on Iran.
The measures also aim to save the agreement meant to curb Iran’s nuclear ambitions after the U.S abandoned the pact. The EU insists the deal is important for global security and is trying to keep economic and financial supply lines to Tehran open. …
The mechanism stops European companies from complying with the U.S. sanctions unless they have authorization from the Commission. National governments could impose “effective, proportionate and dissuasive penalties” on any of their companies that cave in.
The statute also blocks the effects of U.S. court actions in Europe and allows European firms to recover damages arising from the sanctions from anyone who causes them.
That puts these businesses in a vise. They’re damned if they do business with Iran and damned if they don’t. This may backfire on Europe in a big way if they begin to penalize US-based companies who might decide to relocate away from the EU to escape their jurisdiction. It could just as easily backfire on the US, isolating us from key allies needed to make the pressure on Tehran work. This might split the West more significantly than Russia, at least in economic terms.
It’s a bigger risk than Trump took in North Korea in three ways. First, Trump’s risk with the Kim regime was for greater engagement rather than more isolation. Second, a global consensus existed about the danger of the Kim regime. The Obama-Kerry giveaway demolished that consensus on Iran. Third, and probably most importantly, North Korea doesn’t have any real export potential, but Iran has lots of oil, and the Europeans need it more than we do. Trade with Iran is a strategic concern, which is what drove the concessions in the JCPOA.
It’s interesting to note that the sanctions will take effect the day before the midterms. Perhaps Trump thinks he can force some concessions by Iran in the next 90 days. So far, the threat of sanctions seems to have had a big impact, with the Iranian rial plunging in value thanks in part to price controls imposed earlier this year. The escalating economic crisis has prompted popular protests in Tehran and throughout the country. However, the mullahs have ridden out worse for much longer stretches, and Trump might have to take a step or two back after the elections when the conflicts with the EU begin in earnest.