Donald Trump says US is out of Iran nuke deal, will impose sanctions
After announcing that the US was pulling out of the Iran nuclear deal, Donald Trump on Wednesday said US economic sanctions on Iran to undermine “a horrible one-sided deal that should have never, ever been made.”
President Donald Trump on Tuesday said the United States was leaving an international nuclear deal with Iran and it will reinstate “powerful” economic sanctions on the country as he proceeded to put on notice nations that do business with related punitive measures.
“This was a horribly one-sided deal that should have never, ever been made. It didn’t bring calm, it didn’t bring peace, and it never will,” Trump said.
He added his decision will prove the United States does not make empty threats.
Trump’s decision followed the failure of talks over the president’s insistence that definite limits be placed on Iran’s nuclear weapons programme going beyond 2030, which has been his key grouse against a deal that he has called a “disaster” and the “worst ever”.
This is yet another Obama-era international agreement or arrangement that the United States has exited on President Trump’s watch so far, following the Trans-Pacific Partnership and the Paris climate accord, both of which he has said he would like to return to under renegotiated terms and conditions.
Abandoning the Iran pact was one of the most consequential decisions of Trump’s high-stakes “America First” policy.
Iran is the third-largest member of the Organization of the Petroleum Exporting Countries and pumps about 3.8 million barrels per day of crude or just under 4% of global supply.
China, India, Japan and South Korea buy most of its 2.5 million bpd of exports.
As a major importer of Iranian crude and products, India will have to recalibrate its purchase arrangement.
Iran used to be India’s second-largest oil supplier before the first round of sanctions and since 2015 it has been the third, behind Saudi Arabia and Iraq, with plans to aggressively win back its lost position.
State-owned refiners in India, who are big importers of Iran oil, have been sympathetic clients drawn to the prospects of a better deal by deeper freight discounts.
But that will all change now, once again.
The president had said while signing the previous certification in January that it would be the last time he approved a deal he had been critical of going back to the 2016 campaign.
Trump has criticised the deal for not being broad enough in scope and long enough in coverage to end Iran’s nuclear weapon programme in perpetuity, not preventing it from developing ballistic missiles capable of delivering and not punishing it for its support of terrorism in the region.
A string of leaders from allied countries that signed the agreement visited Washington DC in recent days to lobby the president to stay in the deal and work towards bolstering it with additional measures.
French president Emmanuel Macron went as far as to propose “a new deal with Iran”, based on four pillars: The Joint Comprehensive Plan of Action (JCPOA), a freeze in perpetuity on Iran’s nuclear weapons programme, ending work on ballistic missiles and punishing it for malign activity int he region.
Trump heard him but gave no assurances.
German chancellor Angel Merkel went back with no guarantees either and Boris Johnson, the British foreign secretary, left for home on Monday after a similar meeting with his counterpart secretary of states Mike Pompeo and NSA John Bolton.
America’s exit could prove fatal for the agreement even if the other signatories — France, Britain, Russia, China and Germany and EU on one side and Iran on the other — stayed with it.
Trump said the nuclear agreement did not prevent Iran from cheating and continuing to pursue nuclear weapons.
“It is clear to me that we cannot prevent an Iranian nuclear bomb under the decaying and rotten structure of the current agreement,” he said. “The Iran deal is defective at its core.”
Trump said he was willing to negotiate a new deal with Iran, but Tehran already has ruled that out and threatened unspecified retaliation if Washington pulled out.
Oil prices recouped some losses after Trump’s announcement, in a volatile session in which prices slumped as much as 4% earlier in the day.
Brent crude futures LCOc1 settled 1.7% lower at $74.85 a barrel, while US West Texas Intermediate (WTI) crude futures CLc1 ended the session 2.4% lower at $69.06 per barrel. Wall Street remained in negative territory, while energy stocks cut earlier losses after Trump spoke.
Licenses for Boeing Co and Airbus to sell passenger jets to Iran will be revoked, US treasury secretary Steve Mnuchin said, scuttling a $38 billion deal.
According to the US treasury, sanctions related to Iran’s energy, auto and financial sectors will be reimposed in three and six months.
Iranian president Hassan Rouhani said on Tuesday that Iran would remain in the deal without Washington. Nevertheless, Trump’s decision to exit the deal could tip the balance of power in favour of hardliners looking to constrain Rouhani’s ability to open up to the West.
Iran denies it has tried to build atomic weapons and says its nuclear program is for peaceful purposes. UN inspectors say Iran has not broken the nuclear deal and senior US officials themselves have said several times that Iran is in technical compliance with the pact.
Iranian state television said Trump’s decision to withdraw was “illegal, illegitimate and undermines international agreements.”
Renewing sanctions would make it much harder for Iran to sell its oil abroad or use the international banking system.
Obama described Trump’s decision to withdraw from the deal, known formally as the JCPOA, as “misguided.”
“I believe that the decision to put the JCPOA at risk without any Iranian violation of the deal is a serious mistake,” Obama said in a statement.
Iran’s growing military and political power in Yemen, Syria, Lebanon and Iraq worry the United States, Israel and US Arab allies such as Saudi Arabia.
Israel has traded blows with Iranian forces in Syria since February, stirring concern that major escalation could be looming. Prime Minister Benjamin Netanyahu made a televised address lauding Trump’s Iran policy and alluding to the tensions over Syria.
Saudi Arabia, Iran’s arch-foe in the Middle East, and Washington’s other Gulf Arab allies also welcomed Trump’s decision.
(With agency inputs)