Why you should care
Because the Middle East just got even more unstable.
This is an OZY Special Briefing, an extension of the Presidential Daily Brief. The Special Briefing tells you what you need to know about an important issue, individual or story that is making news. Each one serves up an interesting selection of facts, opinions, images and videos in order to catch you up and vault you ahead.
WHAT TO KNOW
What happened? U.S. President Donald Trump announced yesterday that the U.S. is withdrawing from the nuclear agreement with Iran — aka the JCPOA, also signed by the U.K., France, Russia, China and Germany — which he criticized as “a horrible, one-sided deal.” He also pledged to reimpose tough economic sanctions on Iran. Trump argued that the country could be on the verge of a “nuclear breakout” at any time under the current agreement, even though the limits placed on Iran’s uranium enrichment and nuclear fuel stockpiles help to ensure no such breakout could occur for at least a decade.
Why does it matter? While Trump’s been threatening to make this move since the campaign trail, the decision leaves the 2015 agreement, which tightly restricts Tehran’s nuclear ambitions and capabilities in return for ending sanctions, in serious jeopardy. For the moment, Iran says it will remain in the deal and seek to save it by reaching out to its European, Chinese and Russian signatories — many of whom have pledged to stick with its terms. Even if the deal is preserved and Iran does not renew its nuclear program, Trump’s decision further isolates the U.S. from Western allies like the U.K., France and Germany, which expressed “regret and concern” in a joint statement.
HOW TO THINK ABOUT IT
The “highest level of economic sanctions.” That’s what Trump promised toward Iran in his speech. Within the coming months, pre-deal sanctions will likely return, with the possibility of even stricter rules being added. Depending on the industry, companies like Boeing and Airbus, which will lose out on an agreed $40 billion deal with Iran due to the president’s action, will have either 90 or 180 days to stop trading with Iran. After 180 days, sanctions will affect Iranian industries including shipping, energy and finance. And businesses that do not heed the new rules after the wind down period are expected to face consequences, like possibly losing access to U.S. markets.
Deal or no deal? Both Iranian President Hassan Rouhani and the pact’s European signatories — all of whom maligned Trump’s pullout — have suggested the deal’s not dead yet. French foreign minister Jean-Yves Le Drian said France, Britain and Germany would meet with Iran next week, though it’s unclear what they’ll be able to achieve since observers say the fate of the deal mostly hinges on whether international firms will still do business with Tehran despite U.S. sanctions. But not everyone’s unhappy: Saudi Arabia and Israel, two of Iran’s top regional rivals, endorsed Trump’s decision.
The view from Capitol Hill. The U.S. Congress has mixed feelings about Trump leaving the deal. Some Democrats who originally opposed the deal in 2015 now think it would be a mistake to leave it. Meanwhile, top Republican Mitch McConnell welcomed the move. But some Republicans, like House Speaker Paul Ryan and Republican senator Jeff Flake, expressed some concern about pulling out of the deal completely.
Knock-on effects for North Korea. Now that Trump’s torn up one nuclear deal, it’s time to seal another — but some believe the president’s negotiating power over Pyongyang may have been undermined by his policy on Iran. Analysts say Kim Jong Un will have fewer incentives now to seek a deal that could disappear at a moment’s notice. Still, as Trump steams toward his upcoming summit with his North Korean counterpart, he believes his tough talk against Tehran sends a strong message to Pyongyang.
WHAT TO READ
Iran Is Now Unfettered, by Borzou Daragahi at The Atlantic
“If the deal fully collapses, Iran’s neighbors who opposed it may also one day be challenged by a country with a nuclear program that is no longer under the 24-hour scrutiny of international inspectors.”
Why Trump Torpedoed Obama’s Iran Deal, by John Hudson and Philip Rucker in The Washington Post
“For Trump’s longtime advisers, the only surprise in Tuesday’s announcement shredding the Iran deal was that it took the president 15 months to make.”
WHAT TO WATCH
Iranians Worry About Economy After New U.S. Sanctions
“We already had a terrible situation before the new sanctions. We are under such economic pressure. All my friends are thinking to move from Iran to another country.”
Watch at Radio Free Europe:
How the Iran Nuclear Deal Works, Explained in 3 Minutes
“The inspections that the U.S. got out of this deal are frankly just astonishing. One arms control analyst said he thought there was a ‘100 percent chance that if Iran cheated, they would be caught by these inspections.’”
Watch on Vox on YouTube:
WHAT TO SAY AT THE WATER COOLER
Trump’s controversial decision to reimpose economic sanctions could significantly cut Iran’s export capacity and take hundreds of thousands of barrels out of the market. Oil prices jumped to a three-and-a-half-year high at the news. But the actual impact will come down to how China — the largest buyer of Iranian oil — responds, along with the EU, India and others … and whether they’ll continue to import Iranian crude oil in the face of U.S. sanctions. Meanwhile, Saudi Arabia has promised to increase supply to mitigate any shortage of Iranian oil.