U.S. and Iran: Back from the Brink

U.S. President Donald J. Trump delivers remarks to troops at Yokota Air Base, Sunday, November 5, 2017, in Tokyo, Japan.  (Official White House Photo by Shealah Craighead)

In U.S. President Donald Trump’s telling, 10 minutes from launch, he called off military strikes on three sites in Iran, which were to be conducted in response to Iran’s downing of an American RQ-4 unmanned aerial vehicle on June 20. President Trump emphasized that the expected casualties from the strikes – he was given an estimate of 150 Iranians – were not proportionate to the destruction of an unmanned system. Instead, the U.S. opted to enact new sanctions and conduct cyber attacks against Iran and its interests.

The crisis with Iran has brewed throughout President Trump’s time in office. He withdrew the U.S. from the Joint Comprehensive Plan of Action (JCPOA) in May 2018, acting on his complaint that the agreement, negotiated by his predecessor President Barack Obama, was insufficient to prevent the Iranian government from the eventual acquisition of a nuclear warhead and unable to address other matters, such as the development of missiles or the Islamic Revolutionary Guard Corps’ foreign activities in countries like Syria and Yemen. Iran maintains a robust missile force, which Iranian officials describe as a strong deterrent against regional threats, that would provide the necessary delivery mechanism in the event Iran developed a nuclear warhead. (Tehran insists it has no such intention.) Ansar Allah, a Yemeni rebel group supported by Iran, has grown bolder in its operations, firing missiles into Saudi Arabia and launching cross-border strikes on Saudi Arabia as well as neighbor United Arab Emirates with drones.

But ahead of the RQ-4 downing on June 20 of this year, tension between the U.S. and Iran appeared to be spiking. As The Economist put it, “Iran’s leaders appear to have ditched their ‘strategic patience’ as they wait for Mr. Trump’s term to end.” In May and then again in June, commercial tankers have been sabotaged near the Strait of Hormuz. A total of six such vessels have been hit in what U.S. officials, as well as the powerful Saudi Crown Prince, stated were Iranian attacks. Iran denies any involvement in the attacks, but has regularly touted its capability and willingness to close down the Strait of Hormuz if it felt that it needed to. Rocket fire of uncertain origin has hit foreign oil firms in southern Iraq, prompting speculation of involvement from Iranian-backed militias in that country. While compliant with the JCPOA since the agreement was negotiated, and over a year after the U.S. left, Tehran has signaled that its participation in the deal is waning, as the country’s uranium stockpile should soon breach the limit allowed under the deal.

It is in this environment that the shoot-down of the RQ-4 occurred, raising fears of a direct conflict between the U.S. and Iran. And if the reported details of the planned strikes are accurate, the U.S. nearly did retaliate with military force, which could have resulted in a war, depending on the Iranian reaction. It is hard to see Iran not carrying out its own response, overtly, in the event the U.S. launches strikes on its territory.

The cancellation of the strikes brings the two parties back from the edge, even if only just slightly, as both countries remain on a war-footing. The U.S. has moved additional military assets to the Persian Gulf region, while Iranian officials claim that the “crushing response” to the drone “can always be repeated.” IRGC Maj. Gen. Hossein Salami asserted, “We declare that we do not want war with any country but we are fully ready for war.” President Trump has declared, “Any attack by Iran on anything American will be met with great and overwhelming force. In some areas, overwhelming will mean obliteration.”

Political tension between the sides remains high. Washington unveiled new “hard hitting” sanctions on June 24 that will “increase pressure on Tehran.” But nevertheless, throughout the standoff, Washington and Tehran have suggested some willingness to hold dialogue similar to that conducted during the Obama administration, but, crucially, differ on pre-conditions to such talks. The U.S. is said to have reached out to Iran through various channels, seeking no pre-conditions for what could be expected to be wide-ranging talks. Iran, however, wants the U.S. to relax sanctions prior to new negotiations.

President Trump is exploring whether it is possible to bring the Iranian government to the table without that pre-condition being met, or, in any case, without dramatically easing the pressure. In his series of tweets confirming the decision to cancel strikes on Iran, President Trump said he was “in no hurry.” The U.S., from his view, can wait, while economic sanctions continue to bite Iran, increasing domestic discontent with the Iranian government.  American sanctions on Iranian oil exports have reduced the government’s revenue dramatically – U.S. Special Representative for Iran Brian Hook said that the sanctions have denied Iran up to $50 billion in oil export revenue – and pressure on the European Union has prevented its trading mechanism with Iran from offering Tehran a meaningful way around U.S. sanctions. Some key international powers are not on board with the American approach, such as China, which insists it will still import Iranian oil.  But overall, Iran’s economy is expected to contract in 2019 under the pressure.

The U.S. is thus in a position where it can be patient and ignore demonstrations of Iranian force that do not need a military response. President Trump was keen to strike a difference between the downing of unmanned and manned aircraft. Iran says it could have shot down a manned American aircraft, which almost undoubtedly would prompt a hard American response. In the absence of such an attack, however, the White House is largely content to avoid military-to-military confrontation and let Iran engage in the low-intensity activity seen over the past few months. President Trump and his advisers might even view the Iranian attacks as designed to help the Iranian government save face should it enter into negotiations again with the U.S. after the failure of the JCPOA. As CFR fellow Ray Takeyh wrote in Politico on June 22, Tehran aims not for war but rather “to enter talks with Washington claiming to be the empowered party that has withstood America’s strategy of maximum pressure” – and the apparent White House reversal on the strikes offers just the opportunity for Iran to make such a claim.

But while Iran will be able to use the show of defiance to maintain credibility in the event the government feels it has to enter talks absent its pre-conditions being filled, the Iranian government plausibly views the strikes as useful toward turning international opinion against the U.S. and getting world powers to bring the U.S. to negotiate. The various attacks do two things: demonstrate to extra-regional powers that a war in the Persian Gulf region will cause serious damage to the global economy, and demonstrate to Iran’s regional rivals, such as Saudi Arabia and the UAE, that Iran can make any war costly for them, too. A source described as a regime insider told the Financial Times, “Our message in recent weeks to the U.S. and its regional allies was clear: our finger is on the button. If you hit three targets in Iran, we will respond by hitting three targets in Dubai.” It is perhaps no coincidence, then, that the UAE has been careful in how it characterizes the tanker attacks, in particular blaming a “state actor” for them but not identifying any “state actor” by name.

The off-ramp for the tension would be to increase direct communication between the U.S. and Iran, with the goal being a new round of nuclear talks. While back-channel dialogue, being that it is discreet, is generally possible even under tense situations, nuclear talks may be difficult to achieve in the present environment. Iran is looking to see how President Trump performs in the 2020 election. A Trump loss in that vote might pave the way for a successor with a mandate to either restore the JCPOA or, at least, come to the table under conditions more palatable to Iran.

President Trump, who campaigned on leaving the JCPOA and achieving a better outcome, sees no meaningful pressure to negotiate with Iran ahead of the 2020 elections, where he can be certain to campaign on leaving the deal, particularly as the various Democratic primary candidates have set their sights on criticizing his approach. Should Iran drop its demand for an end to sanctions first – or, perhaps, accept an end to specific sanctions as a goodwill gesture – President Trump would undoubtedly be interested in dialogue. His decision not to strike Iran provides flexibility that enables him to continue extending the option of talks under conditions that offer the U.S. a stronger hand.

But otherwise, President Trump sees little need to change track on a policy that is squeezing the Iranian government. This is evidenced by the latest round of sanctions, rolled out after the RQ-4 shoot-down. The June 24 sanctions included Iran’s Foreign Minister, Mohammed Javad Zarif, who was a key player in the previous round of nuclear negotiations. Foreign Minister Zarif developed a rapport with former U.S. Secretary of State John Kerry under the Obama administration, building a degree of trust between the two that helped pave the way for the JCPOA. Speaking after the June 24 sanctions came out, Iranian President Hassan Rouhani questioned, “You call for negotiations. If you are telling the truth, why are you simultaneously seeking to sanction our foreign minister?”

Sanctioning Zarif sends the message to Tehran that Washington is not serious about the dialogue with Iran, or, more specifically, with the Rouhani administration. That may be just as well, for the Iranian Supreme Leader Ali Khamenei may be seeking fresh faces to negotiate with the U.S., given the failure of the JCPOA. President Rouhani, who is not eligible to run for re-election in 2021, has been dramatically weakened in part from the collapse of the JCPOA, which was to be a key achievement. Zarif already sought to resign earlier this year, before being convinced to stay, over complaints of being marginalized on some key areas of foreign policy. The loss of credibility in the Rouhani administration incentivizes having a new leadership in place – in other words, after the 2021 Iranian elections – for serious dialogue.

These circumstances suggest that neither party is in a particular hurry to open up a new round of nuclear talks, at least not quite yet. Those, whenever they arrive, are sure to be contentious and, after the collapse of the JCPOA, will be aggravated by a lack of trust between the U.S. and Iran. It would nevertheless be beneficial for regional security for the two sides to lay the groundwork for future nuclear talks by pursuing back-channel dialogue that, through direct communication, can lessen the likelihood of either side miscalculating and crossing the other’s red lines. The RQ-4 shoot-down earlier in the month provided a warning of how close the two are toward an accidental conflict that neither wants.

About Derek Bisaccio

Military markets analyst, covering Eurasia, Middle East, and Africa.

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