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Europe’s Counterpunch to America Over the Iran Deal

Donald Trump may have inadvertently done Europe a favor. By unilaterally and definitively violating the Iran nuclear deal, the Trump administration is galvanizing Europeans in unprecedented ways to challenge the capricious use of U.S. secondary sanctions and American dominance of the global financial system.

These sanctions—which threaten to penalize non-U.S. companies for commerce that would otherwise be legal—are returning with a vengeance after the president’s announcement on May 8 that America is walking out of the Joint Comprehensive Plan of Action (JCPOA). In response, Britain, France, and Germany, in conjunction with the European Union, are working with Iran—and potentially Russia and China—to salvage the agreement and institute countermeasures.

Federica Mogherini, the high representative for foreign policy at the EU, announced on May 15 [1] that experts are looking for ways of “maintaining and deepening economic relations with Iran.” These include ensuring “the continued sale of Iran’s oil and gas condensate petroleum products and petrochemicals,” establishing effective banking relationships, transportation, export credits, and other financing mechanisms for trade and investment with Iran, and protecting EU “economic operators and ensuring legal certainty.”

As of this writing, it is by no means assured that Europe can come up with measures that will fulfill these goals. Major multinational firms, weighing the benefits of an $18 trillion U.S. market versus Iran’s $400 billion market, may quietly wind down their Iran business to meet an American deadline six months from now.

But something is changing in the transatlantic relationship that gives hope to those seeking to maintain the JCPOA and to augment Europe’s role as a major economic and diplomatic player.

“There was until now no political will” to challenge the U.S. in this way, said Delphine O, a member of the French National Assembly, speaking on May 15 at the Atlantic Council [2]. “I think this has changed.”

Omid Nouripour, a member of the German parliament who also spoke at the Atlantic Council, said Trump’s decision to quit the JCPOA and re-impose secondary sanctions—at a time when Iran has complied with the required restrictions on its nuclear program—has created a transatlantic crisis worse than during the Vietnam and Iraq wars.

With Vietnam, he said, Europeans were “touched by the pictures” of suffering Vietnamese; with Iraq, “no one had an idea if there was a plan for the day after” and didn’t anticipate the chaos the removal of Saddam Hussein would bring to the Middle East. With the Iran deal, however, he said, “the core security interests of Europe are touched.”

Nouripour warned that if Iran also left the JCPOA and resumed its full nuclear program, it would touch off a cycle of proliferation “starting with Saudi Arabia and ending with Turkey.” The presence of nuclear weapons so close to Europe, he said, would be akin to the Cuban Missile Crisis of the 1960s when the Soviet Union put nuclear weapons 90 miles off of American shores.

This threat—and the seemingly cavalier way in which it was precipitated following strenuous European efforts to keep the U.S. in the Iran deal—is shaking the foundations of the transatlantic relationship and an international world order that the United States was instrumental in establishing after World War II. It comes as Washington is threatening a trade war with Europe over aluminum and steel, excoriating the Europeans for not spending more on their own defense, and taking other controversial steps—such as leaving the Paris climate accords and moving the U.S. embassy in Israel to Jerusalem—that contradict EU and international policy.

“There is a shrinking political space in our countries for people who will support this transatlantic relationship,” warned the French parliamentarian, O, who comes from the La République En Marche party of President Emmanuel Macron.

France, she said, has been preparing for this moment for a year, even while trying to convince the United States to remain within the agreement. While in the past she’d had trouble getting the French interested in the topic of secondary sanctions, that has now changed.

“I’ve never seen such a mobilization at all levels…on this issue,” O said. “Not because people care about Iran so much” but because of patriotism and “a way of saying ‘we do not bend to the Americans.’”

The crisis between Europe and the United States is a boon, of course, to Russia and China, which see the American withdrawal as favoring their own interests in Iran. During the last period of severe sanctions on Iran, both abided by UN restrictions on arms transfers to the Islamic Republic. But China, in particular, kept up a robust economic relationship and overtook the EU [3] as Iran’s major trading partner.

China, because of the size of its economy, is well equipped to benefit now if European companies shy away from Iran. It can take over the French oil company Total’s major investment in an Iranian gas field and boost an already growing oil futures market [4] denominated in yuan rather than dollars.

Russia, burdened by its own sanctions over Ukraine, is also exploring new Iran business [5].

Nouripour predicted that the EU would have to collaborate with Russia and China to salvage the JCPOA. President Trump, he said, is “driving us into the arms of the Chinese and Russians.”

The Trump administration seems to believe that Europe will pressure Iran to resume negotiations on a “better” deal than the JCPOA. But the Europeans say that while they will continue conversations with Washington about Iran, the responsibility for devising a new strategy to contain both Iran’s nuclear program and its regional ambitions lies with the Trump administration.

“We have not seen (anything),” said Caroline Vicini, deputy head of the EU delegation to the United States. “It’s up to the United States to come up with a plan.”

Barbara Slavin directs the Future of Iran Initiative at the Atlantic Council.

24 Comments (Open | Close)

24 Comments To "Europe’s Counterpunch to America Over the Iran Deal"

#1 Comment By LouisM On May 16, 2018 @ 12:01 pm

The US has no plan for Iran.
The US exited the JPOA to placate and pacify AIPAC, Israel and the domestic jewish lobby.

Yes, China and Russia will benefit if the EU unwinds trade with Iran. Perhaps I am either cynical or strategic but I think this is exactly what Trump is prepared.

Trump wants import tariffs mostly on EU and Chinese goods/services but doesn’t have the justification to impose tariffs unilaterally without great risk of a backlash. Now Trump can impose all the tariffs he wants on imports and justify it under Iranian sanctions. If the EU unwinds from Iran then Trump wins on Iran. If the EU doesn’t unwind from Iran then Trump wins on imposing tariffs…and the same goes for China (and others) too. Israel cant complain either way…its a win-win-win.

#2 Comment By Voted for him. Once. On May 16, 2018 @ 12:43 pm

I agree with LouisM above. Trump’s playing mostly to Jewish and big money interests here in the US. Not to ordinary Americans who voted for him. We’re still waiting for the wall, the immigration halt, the infrastructure work. He always seems to have time and money for Israel, to keep his Jewish supporters happy, and for Wall Street of course, but not for the rest of us.

If he keeps up the anything-for-Israel stuff, or moves toward war with Iran, he can forget about a second term. He can probably forget about the balance of his first term too, because the Republicans will get smeared this fall.

#3 Comment By Dies Irae On May 16, 2018 @ 12:53 pm

Why should the United States continue a sham alliance with countries that hate their own native populations and are hell bent on replacing them? The Atlantic Alliance is long past its sell-by date (1991).

Besides with whom are we going to negotiate any long-term agreements there? Politically (Western) Europe is a house built on sand. Maybe more prudent to wait until Western Europe settles into its permanent identity as a Muslim region before we start thinking about alliances in the area.

#4 Comment By William Dalton On May 16, 2018 @ 1:16 pm

Here’s a plan to deter the U.S. from imposing secondary sanctions on European companies doing business in Iran – how about imposing a ban on U.S. arms sales to countries in the EU? That should make Donald Trump and his backers take notice.

#5 Comment By collin On May 16, 2018 @ 2:52 pm

I assumed Trump moved on the Iran deal to claim Victory and promised to get a better deal.

I assumed China would not care what Trump does on Iran and continue to invest in Iran and buy lots of oil. And I assumed the EU would nod their head at Trump and continue doing business with Iran and France would get excited to build planes instead of a US worker with Boeing.

So far everything has come true but I am surprised Boeing is not complaining about President Trump costing them plane sales.

#6 Comment By William Pearlman On May 16, 2018 @ 3:34 pm

For the Europeans it’s all about aiding in the destruction. Of Israel. They haven’t changed

#7 Comment By cka2nd On May 16, 2018 @ 3:41 pm

Will the EU cave? With their own problems with austerity, labor law reform and everything else, will the French and German publics really pay that much attention to the Iran issue and force their masters to give the U.S. the nationalist, or at least European, bird? I’m not optimistic, unfortunately.

#8 Comment By tz On May 16, 2018 @ 5:14 pm

The US and the EU has been in a co-dependent relationship since WW2.
Bretton Woods make the USD the gold standard, until Nixon debased the agreement. But the PetroDollar saved us. Will the EU pay for Iranian oil in Euros? If so, will others accept Euros?
NATO – which we expanded, maybe to expand the market for the military industrial complex. And the EU countries weren’t paying their share.
We got mad at Russia – remember the G7 to G8 back to G7?
Interesting times indeed.

#9 Comment By EliteComminc. On May 16, 2018 @ 5:23 pm

I am just going to take China at its word.

They are happy for the US to become more deeply involved in the machinations of Mideast squabbles.

China has been investigating getting around the dollar for more than ten years. In their view time is on their side.

#10 Comment By b. On May 16, 2018 @ 5:36 pm

If the EU refuses to hurt Iran, the US will hurt the EU.

The only possible EU response is to hurt the US in a tit-for-tat. The EU would gain nothing, even if the US took corresponding losses.

Neither Iran nor the EU corporations have any reason to trust the EU, or the US.

China and Russia will pick up EU business in Iran, as they can and should, and Iran will depend on them as they must.

Meanwhile, instead of inept and illiterate comparisons of fictional Iranian, Saudi and Turkish nukes to the Cuban Missile crisis – or indeed to the US Jupiter missiles in Turkey that triggered that crisis – maybe EU politicians should consider whether backing up US “meddling” in the Ukraine and Georgia and US escalation into a new Cold War against Russia – with US nuclear weapons still deployed in Europe as well – is the actual threat and problem here. If the EU thinks breaking JCOPA is their biggest sovereignty and alliance concern here, they are terminally dumb.

#11 Comment By Whine Merchant On May 16, 2018 @ 6:57 pm

“Trump’s decision to quit the JCPOA and re-impose secondary sanctions—at a time when Iran has complied with the required restrictions on its nuclear program…” Says it all –
Israel First! Campaign promises be damned!

But what did you expect? Trump’s track record of duping investors, stiffing creditors, and declaring bankruptcy was in plain site throughout the 2016 campaign.

#12 Comment By Miguel On May 16, 2018 @ 9:10 pm

So, no body could predict the chaos in Iraq after overthrowing Saddam Hussein? For real?

One of the reasons to invade Iraq was that is had changed its foreing money from dollars to euros, in order to sell oil with euros. Iran was meant to follow, if the trick worked. Maybe it will now.

I am going to be naive and silly: I think, since Trump had a success with North Korea being rude, he thinks he can do the same on Iran. But LouisM has a much better point.

#13 Comment By charles cosimano On May 16, 2018 @ 9:34 pm

The EU is all talk and no ability to act. It can be ignored and the US has never been more happy than when it ignores the EU.

It’s opinions are as the squeaking of mice.

#14 Comment By Jeremy 2 On May 16, 2018 @ 9:36 pm

If Macron and Merkel are the public face of the Iran deal, then it’s doomed to fail, sad to say.

@Dies Irae and William Pearlman
So you both support war with Iran, I take it.

#15 Comment By Fran Macadam On May 16, 2018 @ 9:49 pm

“So far everything has come true but I am surprised Boeing is not complaining about President Trump costing them plane sales.”

They’re more than making up for it on the big bump in military contracts and warplane sales. War is the health of the military-industrial state.

#16 Comment By Patrick D On May 16, 2018 @ 9:50 pm

So the U.S. …

– will punish Europe for doing business with Iran even though it has complied with the JCPOA

– but continues to subsidize Israel while Israel rejects joining sanctions against Russia for its activities in the Ukraine.

#17 Comment By Realist On May 17, 2018 @ 4:14 am

“Donald Trump has shaken our transatlantic relationships to their foundations. Now the Europeans are fighting back.”

Right. They’ll cave as they always do….the US owns them.

#18 Comment By John Dirlik On May 17, 2018 @ 7:09 am

Like the tobacco industry that successfully marketed a known carcinogen as feminism (remember the “You’ve come a long way, baby”? Trump is a branding virtuoso who deftly used name-recognition (coupled with demagoguery) to sell himself as an “anti-elite” crusader championing the concerns of ordinary citizens.

The lights were flashy; the spectacle dazzling. Folks lined up to buy tickets. Swamps got drained, though straight into the White House and called jacuzzis. But having paid the price of admission, the audience was reluctant to leave, even as actors fumbled and the show flopped.

Whether weakening restrictions that safeguard the environment, signing the largest military deal in US history with Wahhabis or pulling out of a deal than prevents Iran from developing nuclear weapons, maestro Trump’s goal for his spectacle was short-term gains regardless of long-term consequences.

Statesmen consider these ramifications; populist hucksters don’t.

#19 Comment By Michael Kenny On May 17, 2018 @ 9:53 am

“Donald Trump may have inadvertently done Europe a favor”. Indeed he has! The centrepiece is, as always, Ukraine. If Trump wants unconditional EU and NATO support for sanctions on Iran, all he has to do is get Putin out of Ukraine. One way or the other. At that point, he can name his price. Conversely, if Putin wants EU and NATO support for Iran, all he has to do is get out of Ukraine. If Putin returns Russia to its natural place at the European table and stops trying to re-draw Europe’s post-cold war borders, then he too can name his price. Thus, Trump has also put Putin on the spot. To “win” in Iran, he has to “lose” in Ukraine, but if he abandons Iran, he proves hmself to be an unreliable ally. Either way, he will probably end up discrediting himself with his elderly Soviet-generation supporters back home.

#20 Comment By marylander On May 17, 2018 @ 10:35 am

“So the U.S. …

– will punish Europe for doing business with Iran even though it has complied with the JCPOA

– but continues to subsidize Israel while Israel rejects joiniing sanctions against Russia for its activities in the Ukraine.

Not to mention that Israel has an arsenal of outlaw nukes, unlike Iran. The ignorance and hypocrisy coming from the White House policy on this is stunning.

Why did Trump bother moving the US embassy to Jerusalem if he was also going to move the Israeli capitol to Washington DC?

Looking forward to punishing Republicans this fall for letting Trump run errands for Israel instead of doing his job.

#21 Comment By AK On May 17, 2018 @ 3:28 pm

Michael Kenny, you are saying crazy things. Ukraine for Russian Federation is like Texas for the USA. It will never exchange interests there for some other deal, in Iran or Syria or Korea. It seems, you simply have no grasp of the place that Crimea and Ukraine has in Russian psyche.

#22 Comment By Moone Boy On May 17, 2018 @ 7:01 pm

For the Europeans it’s all about aiding in the destruction of Israel. They haven’t changed

Ultra-Zionists, and bona fide anti-semites, both foster the shared delusion that Jews have to be the centre of everything.

#23 Comment By Moone Boy On May 17, 2018 @ 7:03 pm

Mike Kenny – the average European cares or knows about as much about Ukraine, as the average American does about Panama 😀

#24 Comment By EliteCommInc. On May 22, 2018 @ 12:44 pm

As someone who voted for the current president, I have no issues registering my disappointments. And while I will not dismiss pressures of the the various investigations, that he has been so completely beaten by his opponents once in office is disappointing. I had no illusions about how difficult it would be, but apparently,

I under estimated his as ability to stand.

Neither Jesus Christ care about where the US embassy is. It’s a secular symbol, not an article of faith. I will be waiting to see if actually leads to peace as contended.

What I voted for is an agenda that benefits the US first, not Israel Korea or anyone else. It was this executive’s choice to invite his enemies into his cabinet. It was disappointing at the time, but I gave him the benefit of the doubt. I don’t regret my vote considering the alternatives. And I continue to look for signs that we are going to get down to the hard work of reinvigorating and building a better set of policies that benefit US citizens.

That’s what I voted for. He was a start, if he is incapable or unwilling, then I am more than happy to look elsewhere. But while he is in office, the game plan for which I voted is where I stand.

I don’t think I stand alone, but if so — so be it.