Trump has decided to pull out of the Iran nuclear deal - here are the winners and losers
- President Donald Trump decided on Tuesday to withdraw the US from the 2015 Iran nuclear deal.
- An Iran expert helped Business Insider break down who will flourish and who will suffer as a result of Trump's decision.
- Iran and China may have scored major wins, while the US, Europe and their allies in the Middle East could lose out.
President Donald Trump has decided on Tuesday to withdraw the US from the 2015 Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA).
It wasn't a surprise, but his exit from the multilateral deal, which Trump characterised as an unmitigated disaster, has upset much of the international community.
The agreement, signed jointly with the United Kingdom, Russia, France, China, Germany and the European Union, promised Iran sanctions relief in exchange for limits on Iran's nuclear program.
Trump de-certified the deal in October, but 90 days later he extended sanctions relief for Iran one last time before making his current decision.
Alex Vatanka, Senior Fellow at the Middle East Institute and expert on Iranian-US relations, told Business Insider that fallout from the decision will likely produce some clear winners and losers.
Winners:
Iran
Despite the war of words between Iran and the US, Iran will likely continue business as usual as the US exits the deal.
Iran has previously pledged to remain in the deal despite US withdrawal, and other signatories remain committed despite the US setting a dangerous precedent.
Vatanka explained that, while the Iranian economy will take the brunt of the immediate fallout from the decision, US departure is unlikely to effect Iran on the international stage.
"Nothing will likely happen at the UN National Security Council, and I can't see much happening immediately on the international level."
Vatanka says Trump's decision will hurt investor confidence in Iran, scaring larger businesses away from Iran's potentially volatile market, but could allow smaller businesses to thrive.
"Iran and the US don't really have an economic relationship to begin with, so for Iran, there is the whole world of opportunities outside of the US," said Vatanka, adding that existing trade partners like Europe, the UAE, and China, will continue to keep Iran's economy above board.
Additionally, Iran can use Trump's policy reversal to further marginalize the US on the international stage.
"Iran now has the upper hand to make the US look like the bad actor here," Vatanka explained. "Iran can now say 'we did everything right' as the US walks away."
China
China's role in the JCPOA could be given a boost once the US makes its departure, which would bolster China's existing strategy.
China has been playing a "smart, quiet game" with its Middle East diplomacy efforts, and has focused on trade, allowing them to cement a long-term influence. China is currently one of Iran's largest trade partner and accounts for 22.3% of Iran's total trade.
Vatanka says China could use this opportunity to also gain diplomatic leverage over the US.
"China is the country most likely to fill the shoes of the United States," Vatanka explained. "When the US is out of the equation, it might not be a bad move for China to speak up and present themselves as the one actor that can come in, together with the Europeans and the Russians, to fill the vacuum left by the United States."
Trump has pulled the US out of other major deals in the past, like the Trans Pacific Partnership in January 2017 and the Paris Climate Agreement in June 2017, allowing China take over by redirecting trade agreements in Asia and leading future discussions on climate change.
Losers:
The US
While Trump and other hardline critics of the deal may view his departure as a win, a US departure could alienate the country from the international community and hinder any chances of managing Iran diplomatically.
Trump has suggested renegotiating a deal with Iran to address its ballistic missile program, its role in wars in Yemen and Syria and eliminating the "sunset clause" which allows some restrictions in the deal to expire.
"Trump could now ask Congress to come back to him with some ideas on what the US could do unilaterally in terms of sanctions," Vatanka said, though she doubts that international actors will follow suit.
"The Russians will stick to the deal, China will stick to the deal and major European leaders will likely stick to the deal. It will be a tangle between The White House and Congress which Iran doesn't really care about."
Additionally, Iran is less than eager to come back to the negotiating table with the US.
"There is no way in hell the Iranians at this point would go back and renegotiate with Trump," Vatanka said. Iran believes the time to renegotiate the 2015 deal has since passed, and they have "no incentive" to talk with parties that they feel have not delivered their end.
This could leave the US alone in their sanctions efforts against Iran. Left little diplomatic leverage, Trump could shift the focus to military intervention in order to pressure Iran, Vatanka said.
Europe
European leaders will likely be put in a difficult position when it comes to upholding the nuclear agreement without US backing.
France's Emmanuel Macron, Germany's Angela Merkel and the UK's Boris Johnson have all made trips to Washington over the last several weeks to urge Trump to remain in the deal, but with little impact.
Macron used his three-day visit to buddy up to Trump and propose new changes to the Iranian deal which could allay the President's concerns. However, Macron was grim following the meeting, and said Trump would likely pull out of the agreement "for domestic reasons."
Iranian President Hassan Rouhani responded to Macron's proposal, asserting that the Iran deal stands as is, or does not stand at all.
Rouhani said: "I have spoken with Macron several times by phone, and one time in person at length. I have told him explicitly that we will not add anything to the deal or remove anything from it, even one sentence. The nuclear deal is the nuclear deal."
Germany, too, pressed Trump to remain in the deal, and was less than optimistic about proposed changes.
"The nuclear agreement was negotiated with seven countries and the EU and can't be renegotiated," it said, addling that Germany wants to make sure Iran's nuclear program serves "exclusively peaceful purposes."
Europe must tread carefully, as drastic measures could push Tehran to withdraw from the agreement completely, which would allow it to ramp up its nuclear programs without oversight and dissolve years of difficult negotiations.
Additionally, the European Union, along with France and Germany have vested economic interests in maintaining the deal's status quo. They were once Iran's largest trade partners, and their economic endeavours have only strengthened since the implementation of the JCPOA. Iran officially declared the Euro as its official reporting currency in April, pointing to continued trade plans with European partners.
Israel and Saudi Arabia
Israel and Saudi Arabia have been vocal about curbing Iranian influence in the region. But without US influence in the JCPOA , Trump's Middle East allies stand to gain very little.
Israel and Saudi Arabia are concerned about creeping Iranian influence in the region, particularly through proxies.
Israel has been confronting Iran in neighboring Syria while Saudi Arabia has threatened retaliation for recent Houthi airstrikes targeting them.
"Policymakers within Israel and Saudi Arabia and other countries concerned about Iran's influence will not end their current plans because of the US," Vatanka said.
In the worst-case scenario, US withdrawal could invoke anger in Iran, which could pull out of the deal completely and weaponize their nuclear program in a matter of weeks.
The move would directly threaten the region, and potentially spark an all-out arms race that could have catastrophic results.
At bare minimum, US withdrawal from the nuclear deal could give incentive to regional allies to push their agendas even harder, without the need for diplomatic coordination with the US.
"If the rest of the world goes on without the US, and they all manage to figure out strategy among themselves, that signals defeat for the US," says Vatanka.