The Price of Breaking the Iran Deal

On May 12, President Trump will once again determine the fate of the nuclear agreement with Iran. This week European leaders—first French President Emmanuel Macron, followed by German Chancellor Angela Merkel—have come to Washington to convince Trump to stay in the deal known as the Joint Comprehensive Plan of Action. Macron proposed a plan for a more comprehensive response to Iran’s nefarious activities, which would build on the JCPOA and address U.S. concerns surrounding Tehran’s long-term nuclear plans, missile program, and regional policy, but by his own assessment has likely failed to sway the president. It remains to be seen whether Merkel can do any better.

If Trump walks away, do not expect an immediate emergency but instead a slow-motion crisis that would play out over years and most likely result in the United States and its partners eventually being forced to choose between accepting a nuclear-armed Iran or pursuing military action.

The president has thus far refrained from walking away from the JCPOA due to the opposition of his own Cabinet members, chiefly Secretary of Defense James Mattis, former Secretary of State Rex Tillerson, and former national security adviser H.R. McMaster. This despite the fact that during the campaign Trump deemed the JCPOA one of the “stupidest” agreements America has entered into and pledged to “dismantle” it. These advisers rightly argued that if the United States is seen as shirking the agreement, it would find itself internationally isolated, making it difficult to re-impose sanctions devastating enough to affect Iran’s calculus on pursuing nuclear weapons.

Instead, the president has done everything in his power to raise the uncertainty surrounding the JCPOA, threatening every few months to re-impose sanctions or walk away from the deal. And while many of Iran’s post-JCPOA economic struggles are due to deeper systemic problems within the country’s economy and inflated expectations of what sanctions relief could bring, there is little question that Trump’s threats have exacerbated the situation. The fear that sanctions could return has deterred businesses from entering the Iranian market and deprived the country of some of the economic benefits it had expected in exchange for halting and limiting key elements of its nuclear program.

Trump has also used the threat of withdrawal as leverage with America’s European partners and Congress to negotiate “fixes” addressing his chief concerns with the deal. In reality, it seems that the president is hoping to frustrate the Iranians to the point of abandoning the deal so he can then shift the blame for the agreement’s failure onto them. But negotiations with the Europeans and Congress have yet to yield any major breakthroughs. And with Tillerson and McMaster out of the Cabinet and replaced respectively by hawks Mike Pompeo and John Bolton, and with an impatient president looking to get out of the deal, the JCPOA’s days seem numbered. So what comes next?

One rosy scenario is that Iran would stay in the deal with Europe, Russia, and China and choose not to resume sensitive nuclear activities. Iran would be able to blame the United States for the collapse of the JCPOA and isolate America from its European allies. Indeed, the Iranians have stated that they’d consider sticking to the deal should the United States pull out as long as its European partners continue abiding by the agreement.

Unfortunately, this new reality is unsustainable beyond a few months. Pragmatic officials like President Hassan Rouhani and his Foreign Minister Javad Zarif would favor this course to gain the diplomatic benefits of isolating the United States and engaging Europe. But pressure in Tehran is already building from hard-line opponents of the agreement. And even if European governments commit to doing business with Tehran, European companies won’t risk being sanctioned and blacklisted by Washington. This is why in recent weeks Iran’s government has escalated its rhetoric, noting that it, too, would either withdraw from the agreement or resume key elements of its nuclear program if the United States bails.

But this does not mean that Iran would immediately and furiously start the dash to a nuclear weapon. One need only look at the strategy Iran pursued since the 1980s to understand how it might respond. Prior to agreeing to the JCPOA, Tehran spent years making steady but slow progress toward a nuclear weapon capability. It avoided activities that it assumed would galvanize the international community and potentially prompt an American military response. Instead this incremental progress allowed it to master the uranium enrichment process and amass an enriched uranium stockpile that left it with an option to quickly move to a nuclear bomb if it decided to do so.

Likewise, today the Iranians are unlikely to respond by kicking out all the international inspectors on the ground or by enriching weapons-grade uranium. They probably would not withdraw from the Nuclear Non-Proliferation Treaty, as some officials have been threatening recently. Instead, they are much more likely to incrementally resume the sensitive nuclear activities currently limited by the JCPOA—such as operating more and more advanced centrifuges and surpassing the limits on their enriched uranium stockpiles. And they may not submit to the same intrusive inspections that they have been complying with under the JCPOA. This would be a huge blow to the international community’s knowledge of Iranian nuclear activities as the current increased access is the JCPOA’s most important accomplishment.

We should expect a similarly complicated and confusing picture when it comes to the re-imposition of sanctions. To be sure, many businesses will flee Iran. But political backlash in Europe will keep European governments from vigorously abiding by U.S. sanctions. And several key countries, especially Russia and China, are likely to resist the sanctions. Most importantly, China, a major consumer of Iranian oil, is unlikely to curb its purchases. Beijing would also assume that Washington won’t impose penalties on it that could lead to a global economic crisis. In 2012 and ’13, the United States was able to take off the market half of Iran’s 2.5 million barrels per day of international oil sales. This measure was absolutely critical to bringing the Iranians to the table. Without Chinese buy-in, the United States is unlikely to come close to imposing that kind of economic pain this time. And Washington would not be able to effectively coerce or compel Tehran to return to the negotiating table—and certainly would not be able to negotiate an agreement that is more restrictive than the JCPOA.

In fact, the United States is unlikely to successfully re-engage Iran diplomatically for the foreseeable future, as the Iranians will view any breach of the JCPOA as a clear indicator that diplomacy with America doesn’t pay off. Hard-liners are likely to gain ground in Iranian politics, and pragmatists and reformists will find it difficult to sell any negotiations on key contentious issues domestically—including the country’s ballistic missiles program and support for surrogates and proxies including Syrian dictator Bashar al Assad, Hezbollah, Shia militias in Iraq, and the Houthis in Yemen. Lastly, hard-liners are likely to increase their provocative actions, including ballistic missile tests and imprisonment of dual nationals (particularly Iranian Americans) to project power inside the Iranian political system.

So where will all of that leave us? A U.S. withdrawal from the JCPOA won’t lead to an immediate crisis. But, over time, Iran will get closer to a nuclear weapon as it will begin to slowly restart elements of its program currently halted or limited by the deal. And America will lose leverage over both Tehran and our international partners, leading to a weakened sanctions regime that will fall short of imposing enough pain to alter Iran’s course. In particular, America walking away from the deal will result in a domestic political climate in Iran that overwhelmingly opposes the resumption of any negotiations with the United States. For their part, U.S. partners in the Middle East, particularly Israel and Saudi Arabia, will grow increasingly anxious and call for action. And eventually the United States will find itself having to choose between tolerating a nuclear-armed Iran or taking military action to thwart its nuclear development. It would be the height of folly to go down this path instead of continuing to implement the JCPOA.