- President Donald Trump decided on Tuesday to withdraw the US from the 2015 Iran nuclear deal.
- An expert on Iran helped Business Insider break down who is likely to flourish and who may suffer as a result of Trump’s decision.
- Iran and China may have scored major wins, while the US, Europe, and their allies in the Middle East stand to lose.
President Donald Trump decided on Tuesday to withdraw the US from the 2015 Iran nuclear deal, also known as the Joint Comprehensive Plan of Action.
Though it wasn’t a surprise, Trump’s announcement that the US would exit the multilateral deal, which he has characterised as an unmitigated disaster, has upset much of the international community.
The agreement – signed with the United Kingdom, Russia, France, China, Germany, and the European Union – promised Iran relief from sanctions in exchange for limiting its nuclear program.
Trump decertified the deal in October, though he extended sanctions relief for Iran 90 days later.
Alex Vatanka, a senior fellow at the Middle East Institute who’s an expert on Iran-US relations, told Business Insider that fallout from the decision would be likely to produce some clear winners and losers.
Despite the war of words between Iran and the US, Iran is likely to continue business as usual as the US exits the deal.
Iran has previously pledged to remain in the deal despite the US’s withdrawal, and other signatories have signalled that they’re still committed to it.
Vatanka said that while the Iranian economy would take the brunt of the immediate fallout from the decision, the US’s departure is unlikely to affect Iran on the international stage.
“Nothing will likely happen at the UN National Security Council, and I can’t see much happening immediately on the international level,” Vatanka said.
Vatanka said Trump’s decision could hurt investor confidence in Iran and scare larger businesses away from a potentially volatile market there, but he added that it could allow smaller businesses to thrive.
“Iran and the US don’t really have an economic relationship to begin with, so for Iran there is the whole world of opportunities outside of the US,” Vatanka said, adding that Iran’s trade partners – such as European countries, the United Arab Emirates, and China – would keep Iran’s economy afloat.
Additionally, Vatanka said, Iran can use Trump’s policy reversal to further marginalize the US on the international stage.
“Iran now has the upper hand to make the US look like the bad actor here,” Vatanka said. “Iran can now say, ‘We did everything right,’ as the US walks away.”
China’s role in the Iran deal could get a boost once the US departs, bolstering China’s strategy.
China has been playing a “smart, quiet game” with its Middle East diplomacy efforts by focusing on trade, allowing it to cement its influence, Vatanka said. China, one of Iran’s largest trade partners, accounts for 22.3% of Iran’s total trade.
Vatanka explained that China could use this opportunity to gain diplomatic leverage over the US.
“China is the country most likely to fill the shoes of the United States,” Vatanka said. “When the US is out of the equation, it might not be a bad move for China to speak up and present themselves as the one actor that can come in – together with the Europeans and the Russians – to fill the vacuum left by the United States.”
Trump has pulled the US out of other major deals in the past, like the Trans-Pacific Partnership in January 2017 and the Paris agreement in June, allowing China to redirect trade agreements in Asia and lead discussions on climate change.
While Trump and other hardline critics of the deal may view the US’s departure as a win, it could alienate the country from the international community and hinder diplomacy with Iran.
Trump has suggested renegotiating a deal with Iran to address its ballistic missile program and its role in wars in Yemen and Syria, as well as eliminating the “sunset clause” allowing some restrictions in the deal to expire.
“Trump could now ask Congress to come back to him with some ideas on what the US could do unilaterally in terms of sanctions,” Vatanka said, though he added that he doubts international actors would follow suit.
“The Russians will stick to the deal, China will stick to the deal, and major European leaders will likely stick to the deal,” Vatanka said. “It will be a tangle between the White House and Congress which Iran doesn’t really care about.”
And Iran is less than eager to come back to the negotiating table with the US.
“There is no way in hell the Iranians at this point would go back and renegotiate with Trump,” Vatanka said.
Iran believes the time to renegotiate the 2015 deal has passed, and it has “no incentive” to talk with parties it feels have not delivered on their end, Vatanka said. That could leave the US alone in its efforts to impose sanctions against Iran.
Left little diplomatic leverage, Trump could shift the focus to military pressure, Vatanka said.
European leaders are likely to be in a difficult position when it comes to upholding the nuclear agreement without the US’s backing.
French President Emmanuel Macron, German Chancellor Angela Merkel, and the UK’s foreign secretary, Boris Johnson, have all made trips to Washington over the past several weeks to urge Trump to remain in the deal.
Macron used his three-day visit last month to buddy up to Trump and propose changes to the deal to allay concerns. But Macron was grim after the meeting, saying Trump would most likely pull out of the agreement “for domestic reasons.”
Iranian President Hassan Rouhani responded to Macron’s proposal, asserting that the Iran deal stands as is or not at all.
“I have spoken with Macron several times by phone, and one time in person at length,” Rouhani said. “I have told him explicitly that we will not add anything to the deal or remove anything from it, even one sentence. The nuclear deal is the nuclear deal.”
Germany, too, pressed Trump to remain in the deal and was less than optimistic about proposed changes.
“The nuclear agreement was negotiated with seven countries and the EU and can’t be renegotiated,” a German foreign ministry spokesman said, adding that Germany wanted to ensure Iran’s nuclear program serves “exclusively peaceful purposes.”
Europe must tread carefully, as drastic measures could push Tehran to withdraw from the agreement, allowing it to potentially ramp up its nuclear programs without oversight and dissolve years of difficult negotiations.
The European Union has vested economic interests in maintaining the deal’s status quo. It was once Iran’s largest trade partner, and its economic endeavours have only strengthened since the implementation of the Iran deal.
Iran also last month made the euro its official reporting currency instead of the dollar, pointing to increased tensions with the US.
Israel and Saudi Arabia
Israel and Saudi Arabia have been vocal about curbing Iranian influence in the region, particularly through proxies. But without US influence in the Iran deal, its Middle East allies stand to gain very little.
“Policymakers within Israel and Saudi Arabia and other countries concerned about Iran’s influence will not end their current plans because of the US,” Vatanka said.
In the worst-case scenario, the US’s withdrawal from the deal could provoke anger in Iran, which could pull out of the agreement and weaponize its nuclear program in a matter of weeks.
The move would directly threaten the region and potentially spark an arms race that could have catastrophic results.
At a bare minimum, the US’s withdrawal could give an incentive to regional allies to push their agendas even harder without a need for diplomatic coordination with the US.
“If the rest of the world goes on without the US, and they all manage to figure out strategy among themselves, that signals defeat for the US,” Vatanka said.
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