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'President Trump’s decision to withdraw the United States from the Iran agreement may be the most dangerous and destabilizing move yet of his tumultuous presidency,' Frank Wisner, expert in foreign service, and Nelson Cunningham, advisor to Joe Biden and John Kerry and special advisor to Bill Clinton, wrote in National Interest.
'The Joint Comprehensive Plan of Action (JCPOA) is properly viewed as a triumph of multilateral diplomacy and a major step toward two major goals properly embraced by any responsible government: nuclear nonproliferation, and long-term stability in the Mideast. Even those skeptical of the agreement when reached in 2015, such as General James A. Mattis, now Secretary of Defense, have argued now it would be a mistake to withdraw.'
National Interest wrote that President Donald Trump’s unilateral withdrawal, on May 8, will have a host of damaging geopolitical consequences. On top of that, it may also damage US economy. The Iran agreement had the formal support not only of the US major allies (the UK, France, Germany and the EU) but our most significant rivals (Russia and China).
By walking away from it, President Trump risks reigniting Iran’s nuclear program; he has raised the ceiling on Mideast regional violence in numerous proxy wars; he has ended decades of measurable progress toward a world where nonproliferation is the norm and nuclear weapons the exception; he has driven Iran toward Russia and China; and he weakened the transatlantic alliance with Europe that has safeguarded the world since 1945.
What's more, Trump may have set the ground for his biggest disruption yet in our world trading system; by undoing TPP, redoing NAFTA, rebalancing the US-Korea Free Trade Agreement and threatening to impose tariffs on Chinese and other goods, he has unsettled each of America’s trading partners in different ways. But the withdrawal from the JCPOA threatens to disrupt all the US' trading partners, all at once. The greatest harm will be suffered by US' closest allies, and the greatest benefit will flow to their greatest rivals. Withdrawal is therefore geopolitical folly and economic destabilizer, all at once.
In withdrawing from the agreement, Trump promised that powerful US sanctions would be imposed on Iran—and also on US companies that violated those sanctions. So-called “secondary sanctions” will also punish foreign firms that trade with Iran. Further, they may punish US firms that do business with those firms, national interest wrote.
These US sanctions will apply to firms based in Europe, Canada, Japan, Korea, India, and Latin America; in other words, United States' largest and closest trading partners. They will theoretically impact firms based in China and Russia, but Russia is already fighting back with counter-sanctions legislation and no one expects China to rein in its companies who are already rushing into the vacuum left by the US withdrawal. If the US forces European and other companies out as well, that vacuum will be even greater and so will the Russian and Chinese opportunities.
Explaining the new Iran policy, Secretary of State Mike Pompeo made clear in a speech at the end of May that sanctions are at the heart of the Trump strategy. He conceded that “our reimposition of sanctions and the coming pressure campaign on the Iranian regime will pose financial and economic difficulties for a number of our friends”—but suggested no letup of that pressure.
'Sanctions are central to Trump’s strategy toward Iran. Trump and his key advisors John Bolton and Mike Pompeo believe that every dollar (or euro or ruble or yen) that is directed to Iran goes straight to the pockets of hard-liners and funds their disruptive behavior abroad. Those funds, they believe, make the world less safe and only serve to strengthen an autocratic regime, [as they put it].'
The Europeans face a more complex calculus. They are the most wedded to the multilateral diplomacy behind the Iran deal, and to the prospect of positive change in Iran wrought by engagement. They are also most angered by US' Trumpian methods. In the words of Donald Tusk, the EU president, “With friends like Trump, who needs enemies?” The French finance minister called for proud resistance: “Do we Europeans want to be vassals standing at attention to obey the decisions of the United States?”
On May 18, European Commission president Jean-Claude Juncker proposed a series of measures including a “blocking statute” that would forbid EU companies from obeying US sanctions law and protect them against fines and penalties, as well as a mechanism to permit member states to make direct payments to Iran for oil without using US financial institutions subject to sanction. “[W]e have the duty,” he said, “to do what we can to protect our European businesses, especially SMEs.” On June 6, the EU formally updated its blocking statute to protect against U.S.-Iran-related sanctions.
'The Europeans may not be able to live up to these bold promises in the face of withering US economic pressure on their companies; just this week, the three European signatories and the EU wrote to the Trump administration, urging exemptions for European firms from US sanctions, though expectations for a positive response are muted.'
National Interest added that how can it profit the United States to humiliate US closest allies with the strength of US economic might? Already, European leaders are diversifying their relationships. French President Emanuel Macron was in Moscow last week meeting with his Russian counterpart Vladimir Putin, and German Chancellor Angela Merkel was in China.
In the coming weeks, the extent of economic fallout from Trump’s 'rash and ill-considered decision will become clearer;' European firms will have to face the reality that they have to choose one market: Iran's or the US's.
The only winner's of Trump's impulsive decision will be China and Russia that will fight back the US imposed sanctions.
Lest we forget—Trump’s impetuous and unwarranted withdrawal will make the world less safe, the chance of regional stability in the Mideast less certain, and the risk of violent conflict higher still.
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