Trump's withdrawal from the nuclear deal strenghtens Iran's hardliners

On 8 May, four days ahead of schedule, President Trump announced the United States’ withdrawal from the Iran Nuclear Deal, formally known as the Joint Comprehensive Plan of Action (JCPOA). In response, the Iranian government issued a statement which basically maintains the European Union should compensate for the US exit from the agreement, or Iran will also withdraw from the accord.

The Iranian statement said that the Atomic Energy Organisation of Iran (AEOI), the main body responsible for operating nuclear installations, had been tasked with taking all necessary steps in preparation for Iran to pursue industrial-scale enrichment without any restrictions. The deal hangs in the balance. If the EU fails to defend its interests against Trump’s threat of secondary sanctions against European business activities in Iran, the JCPOA will be assigned to the dustbin.

Although there was national unity in Iran’s political establishment supporting the nuclear deal, hardliners had warned against signing any deal with what they call the ‘Great Satan’ – the United States of America.

As many have pointed out (most recently Seyed Hossein Mousavian – a former Iranian diplomat and current scholar at Princeton University) there are two schools of thought on dealing with the West in the Islamic Republic. One of them favours engagement and negotiation with the US, the camp of President Rouhani and Foreign Minister Zarif, while that of the Supreme Leader and his hard-line followers maintain the view that dialogue with the US is useless and futile since they cannot be trusted.

Although Khamenei quietly backed the nuclear negotiations because he wanted the economic sanctions to be lifted, after the deal was signed he said it did not constitute any shift in underlying relations between Iran and the US. Khamenei added that Tehran and Washington have diametrically opposed interests in the region. When Donald Trump withdrew the US from the accord, the Supreme Leader was quick to take this as vindication of his judgement. For good measure he also voiced his doubts about the trustworthiness of European states.

President Rouhani and Foreign Minister Zarif now face an uphill struggle to continue defending the nuclear agreement. During the 2013 presidential election, Rouhani’s platform was centred on resolving the nuclear issue, lifting economic sanctions in favour of foreign investment and ending Iran’s diplomatic isolation from the world. But Iran’s hardliners, who benefited from the isolation, favoured a more confrontational approach to the West. They believed that Iran would only be taken seriously if it remained defiant and kept all its cards instead of negotiating them away. Donald Trump has corroborated their narrative; he is willing to negotiate with a nuclear weapon state, North Korea, but not a country that is playing according to the rules, Iran.

With the re-imposition of US secondary sanctions, Western firms will be further discouraged from engaging with Tehran. Due to President Trump’s disdain for the JCPOA agreement from the beginning, business acumen kept big banks, cautious of multi-billion dollar fines from the US Treasury and Iran’s risky investment environment, away from the country.

As a consequence, the prospects for President Rouhani’s foreign engagement have darkened. The slow increase in foreign investment; the volatility of the currency; and perpetually high unemployment, makes Rouhani vulnerable to pressure from both his political opponents and the average Iranian desperate for economic relief. In short, the economic growth that was the incentive for signing the nuclear agreement has not reached the population at large.

Throughout his time in office, President Rouhani and the hardliners have been engaged in a bitter power struggle with the former calling for a lifting of social restrictions, and hardliners fighting back. Using the nuclear issue and the bad state of the economy, Iran’s hardliners will be able to challenge Rouhani. This leaves him no room to manoeuvre on his other reform-minded policies in the field of social and civil rights.

Conservatives had already portrayed the demonstrations that hit the nation in December and January as proof that Rouhani’s economic policies had failed to improve living standards of the majority. In response, Rouhani tried to leverage the protests as evidence of the need for greater freedoms and reform. Now that his sole policy success has been upended by Trump, he risks becoming a lame duck for the rest of his term.

Furthermore, Rouhani will have no incentive, nor clout, to negotiate with the EU on other issues. Iran’s ballistic missile programme and regional involvement are sensitive dossiers, where other power centres such as the Revolutionary Guards already have greater sway as it is. Pressure on Iran over its policies in these areas will bear no fruit. The Supreme Leader will not put his weight behind such negotiations as he recognises that the issue America has with Iran is the very existence of the Islamic Republic, and nothing short of regime change will satisfy Donald Trump and John Bolton.