Iran had been putting on a show of unity in the face of U.S. President Donald Trump’s talk of withdrawal from the landmark nuclear deal, vowing to stay within the bounds of the agreement so long as the U.K., Germany, China, and Russia can secure its benefits.
But Trump’s declaration of an end to participation in the Joint Comprehensive Plan of Action Tuesday afternoon in a speech filled with harsh rhetoric against Iran plunged the country into a new era of uncertainty and gloom.
Trump torpedoed a deal that was a signature foreign policy achievement for the moderate presidency of Hassan Rouhani, as well as that of former U.S. President Barack Obama. The nuclear deal was not only a security guarantee meant to stave off military conflict over Iran’s nuclear program, it was also the basis for a period of middle-class prosperity that was meant to cement the power of the more liberal wing of Tehran’s ruling elite, and marginalize hardliners.
Just minutes before Trump’s announcement, a man on a bus in north-central Tehran glumly told his wife they must wait on the ramifications of the diplomatic crisis before deciding on purchasing a house for 6 billion rials (the equivalent of $150,000) they had been eyeing for weeks with the money they had saved up for years.
“That’s the mood in Tehran,” said the journalist who overheard the conversation and recounted it to The Daily Beast. “I see many people frustrated. The rial is in decline, and prices are soaring.”
Minutes after Trump’s speech, European Union foreign policy chief Federica Mogherini said member states were “fully committed” to preserving the deal. Rouhani said he had ordered diplomats to begin talks with the European countries as well as Russia and China over ways to make the deal work without the U.S., but warned that he had also asked the country’s atomic energy agency to prepare the restart of “industrial scale” uranium enrichment if a deal with other powers fails to secure its interests.
“Iran has always complied with its commitments to the nuclear deal, while the U.S. has never complied with its commitments,” said Rouhani, flanked by cabinet members during a televised speech. “We will wait for a few weeks before [restarting enrichment], and will negotiate with our friends and allies and with the parties who signed the JCPOA. Everything will depend on our national interests. If our interests are secured under the JCPOA, we will continue the process, and if the deal is to be just a paper, then our next path will be clear.”
Rouhani’s speech came quickly after Trump’s announcement, suggesting the decision was the result of a painstakingly crafted consensus with the Iranian regime’s elite. Iran’s Supreme Leader Ali Khamenei has the ultimate say over key national security decisions.
Trump’s speech—in which he called the regime the “world’s leading state sponsor of terror”—was described by Rouhani as a form of “psychological warfare” and “economic pressure” meant to bring Iran to its knees. “We will not let Trump win… against the Iranian people,” he said.
But in spite of the defiant tone, Iran holds limited cards. Re-imposing sanctions on the Iranian Central Bank will make any multinational companies considering deals with Iran think twice, regardless of any assurances provided by officials in Brussels or European capitals.
Europeans, too, have little wiggle room. Tehran can try to play nice, sticking to the deal while using the Trump administration’s belligerence to further isolate Washington from the rest of the world. But while such a strategy might work on Russia or China and protect Iran from any UN Security Council sanctions, Europe has significant stakes in the U.S. market. After Trump’s speech the Treasury Department said it would re-impose sanctions on Iranian plane purchases from both U.S.-based Boeing and Europe’s Airbus, which makes significant parts in the U.S., effectively hampering Iran’s ability to rebuild its airline industry.
“Iran’s options are quite poor,” said Ellie Geranmayeh, a fellow at the European Council on Foreign Relations. “For the Europeans, too, with John Bolton and Mike Pompeo in the White House there is little room for diplomatic achievement.”
Trump warned that any attempt by Iran to ramp up its nuclear program or any other response to the reimposition of sanctions could have dire consequences. Such threats have rarely impressed Iran’s leadership, and have instead often prompted equally harsh threats in response. Using proxy militias and armed forces, Iran can create troubles for the U.S., which has troops in Afghanistan, Iraq, and Syria. “Iran does have the option of turning up the pressure a little bit and doesn’t have to go too far on certain battlefields to remind people it has a capacity to inflict costs,” said Emile Hokayem, a Middle East specialist at the International Institute for Strategic Studies in London. “It has the tools of punishment.”
But Iran’s rivals can also play at that game. Iran’s restless Kurdish, Arab, and ethnic Baluchi minorities all include armed groups that have alleged ties to foreign powers.
Iran also faces significant domestic stresses. The International Monetary Fund estimated that the Iranian economy grew nearly 10 percent in 2017, which contributed to popular support for the deal among some segment of the economy that benefit from international business. But many other sectors of the economy failed to gain ground at all, leading in late 2017 and early 2018 to nationwide protests that revealed the fragility of the regime’s support even among rural and semi-rural people long considered its base of support.
“The lower classes do not care about the deal. They feel that the deal had nothing for them in economic terms,” said Mojtaba Mousavi, founder and editor of Iran’s View, an English-language website based in Tehran. “Most businessmen of the bazaar think the JCPOA was a complete failure and just cost them time and wasted hope. They ask the government to do what is needed to just end this unpredictable situation.”
Hardliners fiercely resisted Rouhani’s attempts to open the internet, relax dress codes, and permit cultural exchanges with the West, arresting dual-national Iranians in an apparent attempt to chill relations with Europe and North America. As Trump’s bid to scuttle the deal plays out over the coming weeks and months, Rouhani’s domestic standing is likely to take an immediate hit among the middle-class voters who’d backed him twice.
“Civil society is disappointed as Rouhani is somehow failing inside and outside the country,” said a journalist based in Tehran, speaking on condition of anonymity. “Rouhani is hopeless. Hardliners have been hurting him since the JCPOA was signed. Rouhani got weaker and weaker. People lost trust in Rouhani and that’s the hardliners’ goal. Trump leaving the deal is a huge blow to him and discredits him in Iranian politics and among his supporters.”
Iran’s hardliners opposed the nuclear deal from the start, arguing the U.S. couldn’t be trusted. Antony Blinken, an Obama administration official who negotiated the nuclear deal warned in a conference call before the Trump announcement that scuttling the deal “will hand a huge cudgel to the hardliners.”
Khamenei, too, voiced doubts about the nuclear deal when negotiations commenced. Some have long speculated that he signed onto the agreement, with severe caveats, sensing that Washington would eventually betray it, thus inoculating the country from ever enjoying normal relations with the U.S. after its collapse.
“What all Iranians have consensus on is that negotiations with the U.S. are not useful,” said Mousavi. “A significant part of Iranians believed we can solve our problems with the U.S. via direct talks, but I don’t see anyone still believing that.”