What Happens if the U.S. Bows Out of the Iran Nuclear Deal?
By reimposing sanctions, Trump risks alienating Europe and freeing Iran to revive its nuclear program.
President Donald Trump will announce Tuesday whether the United States will remain in the nuclear deal reached with Iran and several other countries in 2015, or essentially tear it up. Here are some key questions regarding the announcement and possible scenarios going forward.
What does withdrawing from the deal mean?
At this stage, it probably means reimposing oil-related sanctions on Iran that were lifted more than two years ago under the terms of the agreement. According to U.S. law, Trump must reconsider the issue every 120 days. The next deadline is this Saturday. Trump says the nuclear deal has fundamental flaws. It does little to address Iran’s missile program or its “malign activities” in the region — a reference to Tehran’s military involvement in Syria and elsewhere. U.S. and European diplomats have tried since January to work out a compromise but have failed so far.
How would the decision affect Iran?
The sanctions, first imposed in 2012, cut Iran’s oil exports in half and caused huge economic turmoil in the country, helping bring Iran to the negotiating table. The resulting nuclear deal and the lifting of sanctions prompted Iran’s exports to soar to 2.6 million barrels a day. Trump hopes renewed sanctions would force Iran to submit to tougher restrictions on its nuclear program. But the impact won’t be nearly as dramatic as it was 2012, at least not immediately. According to U.S. law, the sanctions will take effect only in six months. Also, at least some countries, including China and India, might flout the U.S. decision and continue buying Iranian oil.
How will America’s friends in Europe react?
Trump’s decision could cause a serious rupture with European allies already smarting from the administration’s threatened steel tariffs and withdrawal from the Paris climate agreement. Britain, France, Germany, and the European Union have made clear they would view a reimposition of oil-related sanctions as a violation of the nuclear agreement. They have signaled they will not pull out of the deal. Officials also have said they will seek to protect European companies from any U.S. sanctions, using so-called blocking legislation drawn up in the 1990s.
But it’s unclear if the deal can be preserved in the longer term without American support. U.S. sanctions could force European companies to choose between retaining access to the American market or the Iranian one. Most will turn away from Iran instead of risking painful U.S. penalties, meaning that Tehran will see diminishing economic returns, the main reason it signed the accord in the first place.
What will Iran do?
At least initially, Iran could try to isolate the United States by working with the other signatories to the deal to preserve the agreement. But Iranian President Hassan Rouhani is under political pressure to show the economic benefits of the deal, which has been questioned all along by his harder-line rivals in the regime. The country’s economy remains sluggish, and a wave of foreign investment has yet to materialize, partly because Western firms have anticipated Trump shredding the deal.
If European investors flee, Iran may conclude there is no longer any benefit to remaining in the deal. The regime could then decide to start breaching the limits imposed on its uranium enrichment and other nuclear work — effectively reviving its program.
The most drastic option would see Iran pull out of the Nuclear Non-Proliferation Treaty and kick out international inspectors, which Western intelligence agencies say have provided a crucial window into and check on Tehran’s nuclear work. This would signal Iran’s intent to build nuclear weapons and permit the regime to pursue weapons-grade enrichment of uranium without United Nations monitors on hand. Estimates vary, but Iran could build a bomb in about a year’s time or less, based on its current stockpiles of uranium.
Keith Johnson is Foreign Policy’s global geoeconomics correspondent. @KFJ_FP
Robbie Gramer is a diplomacy and national security reporter at Foreign Policy. @RobbieGramer