WASHINGTON: President Donald Trump announced today that the United States will withdraw from Iran nuclear deal. His announcement marks his most important foreign policy decision to date. The U.S., France, Russia, China, the U.K., German, and Iran created and signed the deal, officially called the Joint Comprehensive Plan of Action (JCPOA). The EU joined the deal.
The U.S. withdrawal does not necessarily kill it, but the remaining nations, especially Iran, may not find it worth preserving.
What the nuclear deal did
Under the nuclear deal, Iran was required to cut its capacity to enrich uranium by decommissioning enrichment centrifuges. It decommissioned 13,000 of its almost 20,000 centrifuges and retained only one enrichment facility. It limited the introduction of more advanced centrifuges but continued R&D on centrifuge design.
Iran had to reduce the enrichment level of uranium to 3.67 percent U235 (weapons-grade uranium is enriched to over 90 percent) and reduce its enriched uranium stockpile to 660 pounds.
Additionally, Iran agreed not to reprocess plutonium from spent nuclear fuel. It allowed IAEA inspections to ensure its compliance with the agreement. The restrictions on nuclear research and development would be phased out between 2025 and 2030.
IAEA inspectors and top Trump administration officials agreed that Iran was in compliance with the restrictions.
In return, the U.S. lifted financial sanctions, released $56 billion in frozen Iranian funds, and permitted Iran to sell oil on international markets. The central concession was the lifting of financial sanctions. The U.S. could not in principle prevent Iran from selling oil or purchasing goods from other countries interested in doing business, but those transactions are almost all valued in U.S. dollars, and they go through the U.S. banking system. The financial sanctions cut Iran off from global markets.
What the nuclear deal did not do
Trump criticized the nuclear deal as “rotten” even before taking office; he hinted for months that he would pull the U.S. out of it. Among his concerns was that the deal’s sunset provisions did not permanently stop Iran’s work on nuclear weapons. It did not restrict Iran’s ability to develop, import and sell non-nuclear weapons technology, most importantly ballistic missiles. And it did not stop Iran from supporting conflicts in Yemen and Syria.
U.S. allies agreed that these were serious concerns, but they advised the U.S. to preserve the framework and negotiate improvements. Trump’s insistence is that a new deal is necessary. But a deal that is airtight and would end for good the threat of an Iranian nuclear breakout.
Administration officials say that sanctions on Iran’s automotive, energy and financial sectors will be imposed in three to six months. The other nations in the agreement have expressed regret over Trump’s announcement and their resolve to continue to honor its provisions without the United States. But the end of U.S. financial sanctions was one of the biggest carrots to pull Iran into the agreement. With their return, Iran may not find it worth the trouble.
The possibility of an Iranian nuclear breakout in ten years was always a concern, not least to Israel, but without the agreement, that breakout could occur sooner. Iranian officials are threatening to build more and better centrifuges in the tens and hundreds of thousands, and they can do it. They expanded the number from just a handful in 2003 to about 20,000 in 2015.
The Trump administration believes that Iran will respond to maximum pressure. This, after all, is what it says brought North Korea to the negotiating table. It was sanctions that brought Iran to the negotiating table in the first place, and sanctions will bring it back.
They may not. Trump’s announcement weakens anyone in the Iranian government, including President Hassan Rouhani, who supported the 2015 deal. Opponents warned that the U.S. would not honor the agreement, and they’ve been vindicated. If Iran was in compliance when the U.S. withdrew, its leadership may conclude that negotiation with the U.S. is useful only as a tactical ploy, not as a basis for long-term strategy. This could put the airtight agreement that Trump wants out of his reach.
Trump’s announcement will have a broader impact. Peace negotiations between North and South Korea and the U.S. are in the works. Koreans on both sides of the DMZ will have to wonder how reliable the U.S. will be if at some point dissatisfaction with any deal rises. This won’t make negotiations any easier.
On the economic front, Trump’s decision will probably push the price of oil upward. In 2017, Iran exports were almost a billion barrels of oil and gas condensates. If that is lost to the market entirely, world oil prices will rise.
President Trump is making a gamble. The Iranian leadership knows the risks and limitations their country faces; they may threaten and bluster, but they can be counted on to pursue their own best interests and be rational about assessing them.
The same is true of Israel, one of the few nations supporting U.S. withdrawal from the nuclear deal. If all parties avoid overreaction, Trump might succeed at negotiating a new deal. But that renegotiation would have been necessary in a few years anyway, so Trump seems to be taking large risks for relatively little gain. The crazy-man schtick might work once, but that’s a well he shouldn’t revisit too often.