Trump’s Iran Deal Options

As U.S. President Donald Trump takes over the presidency, there is deep uncertainty about the prospects of his predecessor’s key foreign policy achievement: the nuclear deal with Iran. During the campaign, Trump variously pledged “to dismantle the disastrous deal” and to “force the Iranians back to the bargaining table to make a much better deal.” The first option would be calamitous, but the second is worth considering more carefully. 

It is important to note that, so far, the Joint Comprehensive Plan of Action (JCPOA)—cosigned by Iran and the United States alongside China, France, Germany, Russia, and the United Kingdom—has delivered what it was supposed to: in return for tangible economic dividends, Tehran cannot produce nuclear weapons without detection. Indeed, that is why many in Israel’s military and security establishment favor its preservation. Most Israeli security officials and diplomats whom my colleagues in Jerusalem interviewed last year deemed the JCPOA as a done deal that should be rigorously enforced. Others have had similar observations.

What the deal has not done is either fulfill its advocates’ most optimistic hopes or confirm its critics’ worst fears. Iran has neither moved toward rapprochement with the United States nor committed any serious breach of the accord. 

As with any complex technical agreement, of course, implementation has been uneven. Iran has committed several technical infringements: twice, its heavy-water production exceeded the agreement’s 130-metric-ton cap (by less than one percent). Paradoxically, these problems proved the accord’s efficacy: inspectors quickly detected the violations, and Iran remedied them. In just one short year since the deal was implemented, the United Nations’ nuclear watchdog has confirmed on six occasions that Iran has fulfilled its obligations under the deal.

There have been more serious problems with the sanctions relief promised to Iran in exchange for the country’s cooperation. Iran still lacks normal international banking ties as major financial institutions dally. The country has effectively been prevented from reintegration into the global economy, dashing inflated public expectations of rapid economic recovery. The fact that not a single bank in London has yet been willing to open an account for the Iranian embassy to conduct its daily business is telling.

Trump now may decide to repudiate the agreement, but doing so when Iran is in compliance likely would lead the international community to blame Washington, deeply eroding the broad sanctions coalition that provided leverage for negotiations in the first place. 

Alternatively, Trump could rigorously police implementation while pushing back firmly against Iran’s more aggressive regional maneuvers, such as alleged arms shipments to Houthi rebels in Yemen or deployment of Shiite militias to Iraq’s Sunni heartland. But scrupulous implementation cuts both ways: Lackluster U.S. compliance, including the failure to take affirmative action to suspend nuclear-related sanctions or to grant licenses for legitimate business with Iran and to clarify ambiguities in sanctions relief, such as an acceptable standard of due diligence, will doom the deal. And the risk of an aggressive response to Iran’s regional resurgence is that the JCPOA could become collateral damage in a destructive tit for tat. 

It is implausible that a stronger pact could be built on the existing agreement’s ruins.

The new president could also try renegotiating the deal. As many in his entourage see it, doing so would require introducing new non-nuclear sanctions or a credible military threat to induce Iran to return to the bargaining table. But no Iranian political leader could afford to make more concessions while obtaining fewer benefits—and Tehran has many options at its disposal to spoil an aggressive U.S. approach. At the soft end of the spectrum, the country could play the victim to drive a wedge between the United States and its partners and erode the international sanctions. At the harder end, Iran could ramp up its nuclear program or retaliate against U.S. assets in Iraq and Syria, which in turn could lead to a U.S. (or Israeli) military strike. 

It is not surprising that the parties find themselves at this impasse: powerful stakeholders on both sides have ensured that the deal serves as more of a ceiling than a foundation for Iranian-U.S. détente. Iranian provocations, from ballistic-missile tests to the harassment of U.S. Navy ships in the Persian Gulf and the arrest of Iranian-American dual nationals, give ammunition to Congress, which remains determined to derail any rapprochement and the JCPOA.

These tensions have produced a dangerous conundrum: Without addressing the broader political antagonism that pits Iran against its neighbors and the West, the agreement at best will remain fragile and its implementation halting, but without full implementation, resolving the underlying political antagonism is likely impossible.

Trump could seize on this dilemma to strike a better bargain.

A senior Iranian official recently told me that Supreme Leader Ayatollah Ali Khamenei, by criticizing Iranian envoys in November 2016 for having overlooked important details during the talks, may have meant to open the door to renegotiating the accord. But even if Iran were to agree to renegotiate, it would demand more relief in exchange for more concessions, especially given its discontent with sanctions relief under the current agreement.

An amended accord, assuming it is consensual and mutually beneficial, might repair some omissions in the original and achieve a better and more stable outcome. A Republican president backed by a Republican-controlled Congress would have more credibility in promising incentives to Iran than former U.S. President Barack Obama ever did. But if the United States seeks Iran’s capitulation through either economic pressure, which is unlikely to reach the scope and scale of the sanctions that contributed to the existing outcome, or more dangerously, threatens military force, the result could be explosive. 

In amending the accord, the United States could either strengthen some of the nuclear-related provisions or introduce non-nuclear ones in return for rolling back the U.S. primary embargo, which since the 1980s has broadly prohibited U.S. persons from engaging in transactions with Iran due its support of militant groups in the Levant. With a few exceptions, the primary embargo was not affected by the JCPOA. Specifically, Tehran and Washington could agree to lengthen time frames for restrictions on Iran’s uranium enrichment capacity (now set to fade away starting in 2024) or on its ability to reprocess plutonium (that will sunset in 2030) in return for terminating restrictions on third-party investments in Iran’s energy infrastructure and lifting the ban on the country’s access to the U.S. financial system for trade.

Alternatively, the two countries could agree to jointly promote a regional consortium for uranium enrichment and plutonium reprocessing or an international nuclear fuel bank that would remove the need for domestic enrichment in Iran once the JCPOA sunsets. They could also lead efforts to turn some JCPOA restrictions and transparency measures (for example, the ban on enrichment beyond 3.5 percent and on plutonium reprocessing along with continuous live-stream surveillance of crucial elements of the nuclear fuel chain) into common practice either at a regional or global level.

Of course, the deal could be sweetened with further sanctions relief if the parties could agree, for instance, on curbs on the range and payload of Iran’s ballistic missiles, curtailment of Hezbollah’s role in Syria and Lebanon, or support for a more inclusive government in Iraq.

It is implausible that a stronger pact could be built on the existing agreement’s ruins. But if Trump opts to pursue a realistic better-for-better deal, he could succeed on several fronts: a more durable nuclear accord, a framework for managing differences with Iran, and perhaps even a more stable Middle East.