How Trump Can Reach a New Iran Deal

Iranian President Hassan Rouhani speaks with the media during a news conference in Tehran.
December 20, 2019 Topic: Iran Region: Middle East Tags: IranTehranNuclear WeaponsUnited StatesDonald Trump

How Trump Can Reach a New Iran Deal

In abandoning the nuclear deal with Iran, the Trump administration foolishly disrupted an international consensus on how to deal with Tehran, but a diplomatic path forward does exist.

One reason the economic and political results inside Iran have not been what the authors of maximum pressure may have hoped for is that Iran—no stranger to hardship in time of war or sanctions—has had some success in sustaining its “resistance economy” at a stable, albeit much lower than desired, level. Rouhani was able to point to some signs of this—such as the fact that the non-oil part of Iran’s gdp has increased in recent months—in his speech in September to the United Nations General Assembly. Despite the overall contraction of the Iranian economy over the past year, it still is larger than it was when the JCPOA went into effect in 2015. The International Monetary Fund estimates that contraction of the Iranian economy will stop and small growth will resume in 2020. The value of the rial relative to the U.S. dollar has gained appreciably since April 2019 and is well above its record low of September 2018.

Average Iranians still have ample reason to be unhappy about their economic circumstances and about mismanagement and corruption within their own government. But they also have been given strong reasons to place the largest blame for their plight on U.S. policies. The Revolutionary Guard, with its control over smuggling and other major sectors of the economy, has probably been hurt least by the sanctions. For the Iranian public, the financial sanctions that have inhibited trade in food and medicine have negated U.S. assurances about allowing humanitarian imports. The Trump administration’s assertions that it is acting for the benefit of ordinary Iranians also have been belied by its Muslim travel ban, which has affected Iranians more than any other nationality and has kept many family members apart from each other.

Trump may not understand most of the reasons his Iran policy has not been working, and maybe he will not openly admit that failure. But he can see that it is failing. He is thinking of Iran policy not just in anti-Obama or pro-Likud terms, but also as an opportunity for a deal. He probably has concluded that he needs a deal with Iran because the other big items on his deal-making agenda—North Korea’s nuclear weapons and trade with China—have hit snags and have not yet furnished breakthroughs. 

Among the indications that Trump has decided a change is necessary is his dismissal of Bolton in September 2019. Differences over North Korea and other issues also were involved, but Bolton was probably the single greatest impediment within the administration to any constructive dealings with Iran. Trump also has not stood in the way of French president Emmanuel Macron’s efforts to broker a de-escalation of U.S.-Iranian tensions. And Trump has been open about welcoming a presidential-level meeting with Iran. 

The principal resistance to initiating U.S.-Iranian negotiations is currently on the Iranian side. Tehran has no interest in any meeting with Trump that would be little more than a photo op. Rouhani rebuffed Macron’s attempt to arrange at least a phone call with Trump on the fringes of the United Nations General Assembly session in September. Until current policies and circumstances change, meeting with the chief of maximum pressure would be a big political negative for Rouhani, as it would be for any other Iranian leader.

THE IRANIAN regime will continue to insist that the United States make concessions regarding sanctions before any U.S.-Iranian negotiations begin. To do otherwise would be interpreted as a sign of weakness that would undermine Iran’s bargaining position, and would be a political blowback in Tehran against whatever Iranian leader was seen as caving to American pressure. In a speech to Revolutionary Guard commanders in September, Khamenei reiterated the Iranian position that the United States must return to compliance with the JCPOA. In Khamenei’s own words, “If the enemy is able to prove that maximum pressure is effective on Iran, Iran and the Iranian people will never know comfort.” This would only embolden the United States, he explained, to make more demands of the Islamic Republic in the future “in a bullying way.” 

This does not necessarily mean Iran will adhere rigidly to its current demand to remove all sanctions that the United States imposed since renouncing the JCPOA. But there has to be a first move by the United States that is economically significant. A restoration of the waivers that had permitted oil sales to some of Iran’s biggest customers may suffice.

The Iranian leadership’s primary strategy regarding Trump has been to see him as an aberration that will pass—to outwait and outlast him. This was part of their thinking in continuing to observe the JCPOA nuclear limits for a year after Trump’s reneging on the agreement. The Iranians can read American polls. They hear what Democratic presidential candidates say about policy toward Iran, and they have reason to believe that in little more than a year they will be facing a much different situation in Washington. There are likely voices in internal debates in Tehran urging a “hang tough” approach, exhibiting the common tendency of treating sunk costs as investments and arguing that Iran, having put up with so much pain so far, should stick it out for that additional year.

Iran also still has ample reason to distrust Trump as a negotiating partner. The reneging on the JCPOA remains, for the Iranians, Exhibit A in the Trump administration’s disregard for U.S. international obligations. That disregard is not limited to trashing whatever Obama negotiated, as suggested by Trump’s declared willingness to go back on his own recently negotiated North American trade agreement to put pressure on Mexico regarding unrelated immigration issues. The Iranians also have reason to doubt, even after Bolton’s departure, Trump’s ability and willingness to rein in the hawks in his administration who still yearn for regime change. In that regard, it was not reassuring when, during the recent General Assembly session, Secretary of State Mike Pompeo’s most visible speaking engagement in New York was before an anti-Iran group that also hosted the Iranian cult-cum-terrorist-group known as the Mujahedin-e Khalq.

Despite all this, the Iranians are not dismissing the possibility of negotiations with the Trump administration. The economic pain of the sanctions continues, and the regime needs to demonstrate to its population that it is not passing up any possible opportunity to relieve the pain. Tehran can also see that Trumps’ domestic vulnerabilities—his need for a deal and Iran’s demonstrated ability to stand firm so far—mean that Iran, at least as much as the United States, is well positioned to drive a hard bargain. Related to this is Trump’s tendency—demonstrated in his trade deals reached in North America and with Japan—to claim as big victories agreements that differ little from arrangements that previous administrations had negotiated, and that Trump had excoriated. It is easy to envision something similar happening regarding the JCPOA and the Iranian nuclear program.

IF U.S.-Iranian negotiations do begin while Trump is still in office, Iran will have additional reasons to drive a hard bargain, including the political drift in Tehran in favor of hardliners and Iran’s continuing interest in not appearing to cave under pressure. The Iranians are also encouraged by the knowledge that it is the United States, not Iran, that is most isolated internationally on the issue at hand. Only the United States under Trump, and none of the other six parties to the JCPOA, wanted to abrogate the agreement. Although the White House has used U.S. economic clout to coerce most European businesses to stay away from Iran, Russia and, especially, China represent partial economic lifelines for the Iranians. And despite rhetoric within the United States about what it would take to get Iran “to return to the negotiating table,” it was the United States, not Iran, that left that table. The table in question belongs to the joint commission that the JCPOA established, and it is the prescribed forum for countries to address any issues relating to the agreement. Khamenei indirectly made this point when he said in his speech that if America “repents and returns to the nuclear agreement it violated, then with the group of countries that are part of the agreement and talk with Iran, America can also participate.”

U.S. isolation is increasing as key Gulf Arab states move toward rapprochement, or at least a modest détente, with Tehran. The uae did so first, and now the Saudi regime of Crown Prince Mohammed bin Salman (MBS) is following suit. The failure and high cost of the Saudi-led war in Yemen is one reason for Riyadh’s rethinking. Another is the fear of the damage that a war in the Persian Gulf could do to Saudi Arabia and its economy. In this regard, the attack on Khurais and Abqaiq, with its precision and apparent ease in evading Saudi air defenses, was a wake-up call for MBS. Saudi Arabia and Iran will still very much be rivals, but any détente will knock away a major leg on which the whole maximum pressure concept was standing. The Saudi redirection also demonstrates that there are other ways of dealing with an adversary than simply heaping on more pressure, more hostility and more tension.