Trump’s ‘mad mullah’ complex threatens billions in business with Iran

Trump’s ‘mad mullah’ complex threatens billions in business with Iran
Boeing's Everett factory.
By Will Conroy in Prague February 3, 2017

In a fusillade of early morning tweets, Donald Trump on February 2 backed up his national security adviser Michael Flynn in putting Iran “on notice” following its testing of a medium-range missile four days earlier.

“Iran has been formally PUT ON NOTICE for firing a ballistic missile. Should have been thankful for the terrible deal the US made with them!” the American president tweeted, following up with: “Iran was on its last legs and ready to collapse until the US came along and gave it a life-line in the form of the Iran Deal: $150 billion.”

Since his January 20 inauguration, Trump has been uncharacteristically restrained about whether or not he would follow through on his campaign pledge to tear up the Joint Comprehensive Plan of Action (JCPOA). He has described the multilateral agreement between Tehran and the five permanent members of the UN Security Council (China, France, Russia, the UK and the US) as well as Germany, which lifted sanctions in return for Iran ending its nuclear programme, as “one of the dumbest deals” he’s ever seen.

But the latest blunt interventions from Flynn and the commander-in-chief will have spread more jitters among the great number of major companies that have already arrived to do business in post-sanctions Iran since the JCPOA took effect in January last year. Among those companies is America’s Boeing, which has clinched an $8bn order to supply IranAir with an initial 80 aircraft.

Political novice

In mid-January, Iranian President Hassan Rouhani was dismissing Trump’s criticism of the Islamic republic’s nuclear agreement with world powers as “slogans”, while ruling out any renegotiation of the deal, hammered out across 20 months of arduous negotiations. Rouhani on February 1 then belittled the new occupant of the White House as a political novice in comments on the chaotic US entry ban directed at Iranians and citizens of other mainly Muslim nations.

But might he by now be entertaining some second thoughts? Could the Trump administration become so gung-ho that it will swat aside the diplomatic inconvenience that the nuclear deal is a multilateral deal rather than a bilateral agreement that could be nullified by just one signatory?

Reva Goujon, Vice President of Global Analysis at geopolitical advisory company Stratfor, told bne IntelliNews that she did not anticipate that Trump would attempt to scrap the JCPOA.

“I don't believe the Trump administration will make an outright attempt to scrap the nuclear deal,” she said. “There are multiple foreign policy crises already brewing and reopening the nuclear conflict with Iran and contingency planning for a conflict in the Strait of Hormuz would once again suck in US military resources when the US is already going to be spread thin in trying to manage trade and security frictions with China, and keep a check on Russia in a fragmenting Europe all while trying to weaken Islamic State and avoid triggering a global recession through trade wars.”

The JCPOA relieved Iran from US, EU and UN sanctions and gave it access to around $100bn of its own money frozen in accounts around the world. That was agreed in return for a drastic scaling down of its uranium enrichment programme and other activities that could potentially lead to the development of a nuclear bomb.

Interpretations as to whether the missile test breached part of the deal, specifically UN Security Council Resolution 2231, have been mixed. The White House holds that the missile firing was in clear defiance of the resolution, but Iran, along with the EU and Russia, contend that Tehran remains in compliance because the tested missile was not designed to carry a nuclear weapon.

Squishy by design

Stratfor’s Goujon pointed out that Iran has elections coming up in the spring - in which the moderate Rouhani will seek re-election - and the country’s Islamic Revolutionary Guard Corp (IRGC) and military establishment were “very vocal from the start of the nuclear negotiations that ballistic missile development and testing is Iran's sovereign right”.

She added: “The nuclear negotiators didn't want to derail the JCPOA, so they kept the ballistic missile issue separate from the nuclear deal. UN Resolution 2231 calls on Iran to not engage in ballistic missile testing. The language is squishy by design, effectively urging Iran to not do something, but knowing that Iran likely will anyway. This was designed to preserve the JCPOA. But the tricky part here is that the Trump administration and a Republican-controlled Congress are much more likely to impose additional sanctions on Iran due to Iran's ballistic missile activity and other alleged transgressions.”

Iran would in turn perceive that as a violation of its understanding with the US that no new sanctions would be imposed, said Goujon. “That also will play very negatively in the Iranian election season, with Rouhani having to defend a nuclear deal to the public at the same time the US is taking a harder line on Iran. And if Rouhani loses, and a hardliner candidate emerges as the next Iranian president, we will have less restraint from the Iranian side in keeping the deal intact.” 

Observers sticking with the notion that Trump’s bark might be far worse than his bite note that on January 29 Trump actually committed to enforcing the nuclear deal rather than ripping it up. That moment came in a phone call with Saudi Arabia’s King Salman bin Abd Al-Aziz Al Saud. According to a White House readout of the conversation, he pledged to “rigorously enforc[e] the Joint Comprehensive Plan of Action”. The transcript also detailed how Trump and King Salman committed to “address Iran’s destabilising regional activities” and reaffirmed their commitment to the US-Saudi Arabia strategic alliance.

Diplomats at the UN in New York have complained to correspondents that on any one issue they are “flying blind” with Trump as to where he really stands, but one moderating influence on the president’s stance towards the nuclear deal could be his own Defence Secretary, James Mattis.

Although Israeli Prime Minister Benjamin Netanyahu remains vociferous in his judgement that the agreement with Tehran is a historic mistake, retired four-star general Mattis - as noted by Toronto-based veteran journalist and blogger Sheldon Kirshner, formerly of the Canadian Jewish News - told his Senate confirmation hearing that the US has an obligation to adhere to it.

“I think it is an imperfect arms control agreement - it’s not a friendship treaty,” Mattis said. “But when America gives its word, we have to live up to it and work with our allies.” American Secretary of State Rex Tillerson has, meanwhile, proposed a full review of the deal and stronger compliance from Iran, “but [he] stopped short of calling for its outright dismantlement”, wrote Kirshner.

Moscow factor

Another known unknown amid the brinksmanship is how Trump might try to reconcile his hostility to Iran with his outreach to Moscow. Russia is not only pushing for major new post-sanctions era business in the country, it, along with Iran and Turkey, is seeking to put in place a lasting solution to the Syrian conflict, whatever Trump might think of how that might only advance Tehran’s regional ambitions. Analysts are pondering what Trump could offer Putin in exchange for abandoning Iran, a key ally of Russia and growing trade and investment partner which also buys advanced air defence systems from the Russians.

Not that all analysts are convinced Trump knows his strategy from one day to the next. There are those who fear he is easily goaded at any hour. If so, he wouldn’t be thrilled to read a blog post from Jennifer Rubin who writes the “Right Turn” column for The Washington Post, offering reported opinion from a conservative perspective. The January 31 entry, entitled “After a missile test, where is Trump’s Iran policy?” aims barbs such as “…right now Trump has no Iran policy… The mullahs are testing him and are finding him an easy mark.”