Transatlantic turbulence likely after Trump’s decision

Trump’s foreign policy is at least partly driven by resentment of his predecessor, Barack Obama.
Sunday 13/05/2018
Looming slowdown. The fuselage of an Airbus A321 on display at Airbus’ first US manufacturing facility in Alabama. (AFP)
Looming slowdown. The fuselage of an Airbus A321 on display at Airbus’ first US manufacturing facility in Alabama. (AFP)

US President Donald Trump has been accused of not having a cohesive foreign policy. Many say he lacks a cohesive domestic policy. They are wrong.

By pulling out of the nuclear deal with Iran, against the advice of Britain, France and Germany, the United States’ closest allies, Trump left little doubt as to what drives his administration’s agenda.

Trump looks at the world through a very narrow prism, one that will end up hurting the United States and its relations with allies. Trump’s foreign policy is at least partly driven by resentment of his predecessor, Barack Obama, and a desire to dismantle everything Obama stood for during his two terms in the White House.

British Foreign Minister Boris Johnson made a last-ditch appeal to the Trump administration in a visit to Washington a few days before the US president announced his decision on Iran. In late April, Trump hosted French President Emmanuel Macron at the White House and discussed Iran. European leaders say they are open to negotiating a side agreement with Tehran but the existing framework must remain untouched for that to happen.

Faced with a United States determined to pursue its own policy, French, British and German leaders issued a joint statement expressing “regret and concern” and pledging their “continuing commitment” to the terms of the agreement, officially known as the Joint Comprehensive Plan of Action.

On May 8, Trump announced he was pulling the United States out of the international nuclear deal with Iran and would reimpose economic sanctions on Tehran. He called the 2015 agreement signed by Obama “an embarrassment” and “weak, poorly negotiated and insane.”

“The Iran deal is defective at its core. If we do nothing, we know exactly what will happen,” Trump said. “In just a short period of time, the world’s leading state sponsor of terror will be on the cusp of acquiring the world’s most dangerous weapons.”

What Trump is likely to achieve is increased tensions with key US allies who pushed hard to convince Trump not to give up on the deal. The economic stakes are high for Europe. The potential effect of renewed US sanctions is in the billions of dollars.

This is Trump’s most significant foreign policy decision since he was elected. By pulling out of the accord, he aims to send a message to Iran and any other nuclear aspirant that “the United States no longer makes empty threats.”

That said, the US pullout does not kill the deal outright. The Europeans could continue to keep it afloat on their own, at least theoretically.

Tehran could be willing to remain in the agreement with the “solid support” of Europeans but it is unclear whether the Europeans can afford to continue doing business with Iran considering the financial effects of US sanctions on the country.

The scrapping of the agreement with Iran could have negative repercussions on the European job market and economic growth but Europe may not have a way out.

US Treasury Secretary Steven Mnuchin said the Trump administration was revoking licences for Boeing and Airbus to sell jets to Iran, which were issued following the signing of the nuclear agreement. Boeing had plans to sell IranAir some 80 passenger aeroplanes for a contract worth approximately $17 billion with another 30 planes promised to Aseman Airlines for $3 billion. Airbus Industries, based in Toulouse, France, had agreed to sell the Iranians 100 aircraft worth about $19 billion.

“The Boeing and Airbus licences will be revoked,” Mnuchin said. “The existing licences will be revoked.”

Trump’s pulling out of the agreement with Iran is going to hurt European companies that were hoping to enter the lucrative Iranian market. The French oil company Total, for example, hoped to reach an agreement that would give it concessions in Iranian oil production.

Even though Paris, London and Berlin aim to respect the 2015 agreement, doing business with Iran could put them on a US blacklist. This puts a slew of European businesses in a precarious situation. Some of the fallout will unavoidably affect the US economy and its own job market.

Transatlantic ties could be in for serious turbulence.