Analysis

Trump to Renew Sanctions on Iran: A Diplomatic Crisis for the EU

U.S. president Donald Trump pulled the U.S. out of the Iran nuclear deal vowing new and 'powerful' sanctions on Iran

Iranian President Hassan Rouhani attends the National Army Day parade in Tehran, Iran, April 18, 2018
\ TASNIM NEWS AGENCY/ REUTERS

U.S. President Donald Trump announced the United States' withdrawal from the Iran nuclear deal on Tuesday. It will reinstate all sanctions it had waived as part of the Iran nuclear deal, as well as imposing new ones.

"No waiver, new sanctions, a split between the U.S. and Europe," was one of the five scenarios written about by Haaretz' Anshel Pfeffer ahead of Trump's announcement. 

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Here is a breakdown of what that would look like, according to Pfeffer:

The die is cast. Trump not only refuses to sign the waiver, but his administration acts to reimpose sanctions with an accelerated timetable. Whatever these sanctions target – nuclear-related sectors or other Iranian activities – Tehran will cry foul and pronounce the JCPOA dead. But it could still leave the door open to a compensation deal from the other signatories. Russia and China will play along, but they were trading with Iran before the JCPOA as well.

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This scenario could well be the biggest diplomatic dilemma in the European Union’s history. The EU is also a signatory, but EU foreign policy chief Federica Mogherini – a valiant cheerleader for the Iran deal – will be powerless if the leaders of Britain, France and Germany won’t agree on a joint policy. Theresa May, Emmanuel Macron and Angela Merkel will each have to make independent decisions on whether to defy the United States and join a new Iran deal without the Americans, or fall in line with the Trump administration.

This is a momentous decision for the main Western European nations. Do they act against their own stated policies, or open up an unprecedented rift between Europe and the United States? The stakes are particularly high for “Brexit Britain,” which is on course to leave the EU next year. If France and Germany stick with the JCPOA, despite Trump, Prime Minister May’s government will have to decide which relationship they are more loath to jeopardize.

The stakes are particularly high for Britain, as London is still a major global financial hub both for banks and insurance companies. The City of London played a central role in imposing the sanctions on Iran at the start of the decade – and will be crucial in either renewing the sanctions or trying to counteract them, should Britain join the international coalition trying to save the Iran deal.

For Iran, and for Russia and China as well, a major crisis in the U.S.-European relationship, potentially endangering NATO’s cohesion, would be a huge achievement. On its own, it could be a worthwhile incentive for Iran to remain within the JCPOA framework, despite the United States pulling out.