Trump’s speech reiterated his longstanding position that the US should never have agreed to the JCPOA, in part because it failed to constrain Iran’s activities in other areas such as its “malign behavior” in the region and its development of potentially nuclear-capable ballistic missiles.
The decision to withdraw came as little surprise to those who had been following this issue, although it did undermine the lingering optimism among some of the deal’s defenders regarding the specific course of action that the White House would take in re-imposing nuclear-related sanctions. Immediately after his speech, Trump signed a presidential memorandum beginning the process of reinstating sanctions, which he noted would target not only the Islamic Republic and Iranian businesses, but also companies from other countries that persisted in doing business with Iranian entities.
This broader targeting constitutes what the BBC described as a “hard exit” of the agreement, in a report preceding the president’s speech. That report claimed that the White House had hinted that it might not “renege completely” on the JCPOA, and that Trump was generally expected to take a more delicate course of action that would have given Western investors a clear six-month grace period for winding down their activities in the Islamic Republic.
It is not clear whether the Iranian leadership also anticipated Trump taking a less assertive approach to withdrawal. And the answer to this question may affect how one interprets Iranian President Hassan Rouhani’s boastful comments in the immediate run-up to his American counterpart’s speech. Rouhani predicted that the re-imposition of American sanctions would create two or three months of problems for the Iranian regime, but that it would quickly recover.
But these two claims are arguably contradictory, given the current economic conditions that Iran is facing. Last month, the country’s national currency fell to half its value compared to the previous autumn, evincing a crisis that has also had a severe impact on the rates of unemployment and poverty throughout the country. These issues contributed to widespread domestic unrest at the end of last year and the beginning of this year, and also to the several large labor protests that have been observed since that time.
As the dual crises of economic hardship and public protest continue, it seems highly likely that two or three months of additional problems could potentially have a serious impact on the near-term prospects for the Iranian regime. This potential is even more obvious if Rouhani’s prediction was based on an optimistic assessment of the course of action that Trump would take, and of the impact that American withdrawal might have on the possibility of ongoing business deals between the Islamic Republic and European investors.
In fact, it appears likely that Rouhani was taking an optimistic view of the latter subject just a day before Trump’s speech, when he said that Iran might be willing and able to remain a party to the agreement alongside its other signatories – the United Kingdom, France, Germany, Russia, and China – even after the US pulls out. But at the same that Trump’s “hard exit” makes it difficult for the European nations to remain in the agreement without US enforcement measures, the surrounding circumstances may have also amplified opposition to the JCPOA within the Iranian establishment.
The Associated Press report that made reference to Rouhani’s endorsement of ongoing cooperation also noted that UK Foreign Secretary Boris Johnson had met with Trump on Monday to make a last ditch appeal for preservation of the nuclear agreement. This followed upon similar efforts by French President Emmanuel Macron and German Chancellor Angela Merkel as the three European governments sought to meet the May 12 deadline for “fixing the flaws” in the JCPOA to Trump’s satisfaction.
According to Al Monitor, these repeated efforts to “appease” the Trump administration may have closed off the possibility of direct cooperation between Iran and Europe. Indeed, Iranian officials have recently accused the Europeans of giving away concessions on Iran’s behalf, and regime’s leader Ali Khamenei has declared that if the US withdraws from the deal, Iran will do the same. The European decision to explore Trump’s ultimatums instead of defending the JCPOA against his threats has presumably made it harder for Rouhani-affiliated pragmatists to overcome the uncompromising anti-Western sentiment of hardline factions.
If, by some change, Iran manages to keep open the possibility of cooperation with Europe, there is certainly no guarantee that the Europeans would reciprocate. Last week, the UK floated the idea of passing legislation to block US sanctions, as Europe had done in 1996. But in his speech on Tuesday, Trump said of the US, its European allies, and its allies in the Middle East, “We are unified in our understanding of the threat” posed by the Iranian regime. If this is true, or even nearly so, it is difficult to imagine the entirety of the European Union agreeing to take additional steps toward undermining the US in order to keep open the possibility of business deals with Iran.
Even so, Europe’s possible sanctions-blocking legislation is not the only thing threatening to undermine the effectiveness of re-imposed US sanctions. An article at Fox News focused instead on the increasingly close relationships between Iran and the two other JCPOA signatories, Russia and China. The piece notes that these two allies of the Islamic Republic have already provided it with hundreds of billions of dollars’ worth of trade deals, and that there is little chance of the American withdrawal convincing either party to reverse this trend.
In fact, the article suggests that Trump’s move may push the Iran and the two Asian powers closer together, in turn diminishing the harm that Western sanctions cause to the Iranian economy. Already, the Chinese central bank has begun to step in to provide some of the financing that has not been forthcoming from European banks that remained wary of pressure from the US. Now the need for such alternative financing may become more apparent, leading to further measures that circumvent international banking and the US dollar.
But while these countermeasures by Iran and its allies may diminish the impact of re-imposed sanctions, they cannot be expected to eliminate them. And in light of the aforementioned economic crisis, even diminished pressure may be significant, especially if Tehran’s budgetary priorities remain heavily skewed by the perception – or rhetorical invention – of Western threats.
In his speech on Tuesday, Trump pointed out that Iran’s military and paramilitary expenditures had grown this year to approximately 40 percent of its overall budget and that those expenditures had been dedicated to regional activities that were “more brazen” than ever before. The wastefulness of this foreign intervention was distinctly highlighted during Iran’s nationwide protests in December and January, as participants chanted slogans like “forget Syria; think of us.”
These protests evidently factored into Trump’s calculations regarding the future of the nuclear agreement, since his speech on the re-imposition of sanctions included direct references and appeals to the Iranian people, and the statement that “great things can happen for Iran.” Such language presumably indicates that the White House anticipates those people to react with further protests after Iran fails to compensate for new economic pressures in a way that safeguards the public interest.
Maryam Rajavi, the president of the National Council of Resistance of Iran, said in a speech in March that the year ahead would be “a year full of uprisings” ultimately leading to regime change in Iran. There is reason to believe that Trump had something similar in mind on Tuesday when he reiterated an earlier threat: that Iran “will have bigger problems than ever before” if it does not change its behavior in a number of areas, not limited to the nuclear sphere.