On the surface, the Trump administration is united behind a tough Iran policy. The Treasury Department continues to issue sanctions on Iranian individuals and subsidiaries to drain Tehran’s finances — the latest batch being a March 22 designation of 14 Iranians and 17 entities for involvement with the Organization of Defensive Innovation and Research. State Department officials are repeating ad nauseam that Iran is the world’s leading state sponsor of terrorism with hegemonic ambitions to dominate the region. President Trump, with national security adviser John Bolton chirping in his ear, remains as committed to a policy of maximum pressure as when he first hit the trail as a presidential candidate.
But there is a looming battle playing out behind closed doors between those in the State and Treasury Departments who want a more cautious approach to sanctions enforcement and those in the White House and Congress who are chomping at the bit to cut off Iranian oil exports completely. According to Bloomberg News, Bolton has been lobbying for the elimination of the sanctions waivers issued last November, which allow eight countries to continue importing Iranian oil on a temporary basis. Worried about oil prices spiking, Secretary of State Mike Pompeo, Iran sanctions czar Brian Hook, and Treasury Secretary Steven Mnuchin aren’t so sure taking every last drop of Iranian oil off the market is a great idea. Who wins the interagency fight will determine how Iran responds.
Internal resistance to shutting the waivers down revolve almost entirely on economic considerations. Can the global crude oil market sustain low prices at a time when the administration is also trying to freeze Venezuelan exports and starve the Maduro regime of cash? Ask three economists, and you are likely to get different answers.
But the Trump administration appears to be avoiding the larger question: Is the maximum pressure campaign against Tehran actually working? The answer on this one is far more clear cut: No.
This is not to suggest that the economic impacts on Iran haven’t been devastating. They most certainly have. The threat of U.S. secondary sanctions are incredibly powerful deterrents to foreign firms who were either operating in Iran, were in the middle of contract discussions, or were thinking about pursuing business opportunities in the country. Iranian oil exports have decreased from 2.5 million barrels per day in April 2018 to less than 1 million barrels this January. Less oil flowing means less money coming into Iranian government coffers, which of course translates into greater strain on the Iranian budget. European firms that were preparing to do business in the Iranian market after the nuclear deal are now staying far, far away from any transaction touching the Iranian economy. Washington’s sanctions have forced businesses around the world to suspend their plans. Even humanitarian trade to Iran, perfectly legal under the current U.S. sanctions regime, is slowing to a trickle.
The economic losses for Iran, however, have yet to change the country’s behavior — the whole reason the sanctions were crafted to begin with. Iranian technicians and researchers remain hard at work improving and refining Tehran’s ballistic missile capability. The Islamic Revolutionary Guard Corps-Quds Force, backed up by Iranian-funded and Iranian-organized foreign militias, are all but keeping the Assad regime alive. Iranian missile components continue to make their way into the hands of the Houthis in Yemen. Iran continues to possess substantial sway over the politics and economics of its Iraqi neighbor. Despite protestations from the White House to the contrary, Iran continues to comply with the very nuclear agreement it unilaterally withdrew from last year.
The sanctions, in short, have failed to achieve the policy objectives the Trump administration hoped to meet. The Iranians are not on their knees begging to come back to the negotiating table, let alone willing to sign a deal on Washington’s terms. Instead, Tehran remains defiant. Indeed, the fact the administration is working so feverishly to force the Iranian government to stop their missile program, support for terrorism, human rights abuses, and all other behavior Washington considers nefarious is likely encouraging the ayatollahs to clench their fists and resist.
The maximum pressure campaign is not only proving to be ineffective but is also causing strains in critical U.S. relationships from Europe and Asia to the Arab world. European powers like the United Kingdom, France, Germany, and Italy still can’t comprehend why Trump would throw away an accord that has provided the international community with rigorous access to Tehran’s nuclear program.
President Trump has some serious soul-searching to do. He can either continue to listen to his more hawkish national security advisers and hope piling on more sanctions will finally get Tehran to buckle. Or he can swallow his pride and realize that perhaps the current strategy is causing more harm to America’s diplomatic relationships and international reputation than it’s costing to Iran’s wallet.
Daniel DePetris (@DanDePetris) is a contributor to the Washington Examiner’s Beltway Confidential blog. His opinions are his own.
