The United States has withdrawn from the Iran nuclear deal. It is probably the stupidest possible thing to do at this time. Why? Here are eight reasons, most of which are fairly conservative in nature.
1. It damages US influence in the region. The deal is going to be saved by Europe, Russia, and China. As a result, they will have all the potential influence over the region and the US little. Our most important partner in the region, Turkey, already has strained relations with the US over the Kurdish question and has expressed its dismay over our withdrawal in stark terms. “Iran will never compromise on this agreement, and will abide by this agreement to the end. That’s what I think. However, the U.S. will lose in the end,” President Recep Erdoğan told CNN.
2. We have gone back on our word. It is common in the US to say, “Obama made the agreement …. Trump undid the agreement.” That is not how the rest of the world sees this. To everyone else, the US made an agreement and then went back on it. Period. Political instability is not an excuse. We have demonstrated that we are a nation that cannot be relied upon. As someone once wrote in a book called The Art of the Deal, “Once you have a deal, you cannot go back on it. If you go back on a deal no one will ever trust you again.”
3. Sanctions are unenforceable. Trump said that we will be returning to a regime of sanctions against Iran. This is nonsense. We do not have the staff in place in the Treasury Department to do this even if it was possible. And without the rest of the world going along, sanctions are indeed not possible. You want Iranian oil or pistachios or whatever? Buy them from Europe, no problem.
4. This destroys our real power. Make no mistake about it, Iran will continue to pump oil into tankers. Do not be surprised if the contracts for that oil are now written in Euros. That will mark the first time a significant amount of oil is sold in anything other than US Dollars anywhere in the world. It is the first crack in the US Dollar dominance over the world, and once started it is unlikely to be the last. Once Europe has a taste for the stability that comes with Euro contracts for goods, they will start demanding more of them – first from other oil producers, then with everyone. The Bretton-Woods Agreement that created US hegemony after World War II is likely to be the final casualty of this withdrawal. And if oil contracts are priced in Chinese Yuan Renminbi, that fall will come even quicker.
5. Russia wins. Through the horror of the Syrian War, Russia has become closer to Iran. This will increase. More importantly, Europe now must understand that the US is not reliable, and they have to deal with Putin on their own. They have two choices – either improve their own energy self-reliance or move closer to Russia overall. Being the European Union, they will likely do both. And that will mean more Russian influence in Europe and a potential end to the recent willingness to confront Putin.
6. China wins big. For nations that are frightened by an unreliable America, there is one nation that is completely reliable and never changes no matter which way the wind might be blowing. China is a rock of stability in a dangerous world. It is very hard to make a deal with them on favorable terms, but it looks like the investment is worth it for many Asian nations. South Korea and Japan are holding a trilateral conference right now, and you can expect US perfidy to be a topic.
7. Iran’s hardliners win. It suits the extremists in Iran to seal off the nation, blame everything on the US, and continue causing havoc in the region with their various proxies. They now have not just an excuse, but solid proof that the US is indeed a permanent enemy. The nation has become sick of their support for Assad, Hezbollah, and various other fighters while they suffer. But it is now clear that there is something like a war going on. The Iranian moderates lose a powerful argument.
8. Oil will go up. The recent rise in oil prices has everything to do with perceived instability in the world, particularly with regard to Iran’s ability to pump oil. This is likely to calm in coming months as the deal holds without the US. But the upward pressure on oil prices is likely to remain as long as people are nervous, and for all the reasons above they will. This puts pressure on US inflation, already running high, and with it US interest rates. In a time when calm is needed for US markets, we have more uncertainty.
These eight reasons are not the only reasons why breaking the deal is stupid. They are simply the most realpolitik and obvious ones. Transforming the US into a nation that makes good use of diplomacy and its real power, the US Dollar, is something that has to happen. We are far too quick to simply send in our brave soldiers and sailors to do work that is much better done without wasting the blood of America’s best. We have to be a nation which stands for building the world, not destroying it. We must never have permanent enemies.
There is no doubt that Iran has been a rogue nation that needs to be brought into line. This deal should never stand alone as an end, but needed to serve as a staring point for Iran’s entry to the family of nations. Such an effort will take diplomacy and strength both. But we have neither as a result of this decision. Our word is shot, and our allies are not with us. We have lost.
As a science fiction reader and writer, I’m very familiar with dystopian futures. Usually those novels and movies start in the middle, when the miserable future is well established. These days are a terrifying glimpse of how that kind of future begins to take hold.
We are indeed only at the beginning. There is still time to undo this damage, but not much.
Good blog. A good summary of what we can expect.
They want to start a war. This is unbelievable. We learned nothing from the Iraq war.
We learned nothing. Not a thing.
America’s reputation is ruined. No one will ever trust the US again.
This is the end of the American Empire, for sure. We will have no allies once this is all done.
Reblogged this on Penney Vanderbilt and KC Jones: All About Railroads.
Reblogged this on Filosofa's Word and commented:
I have been working for two days to try to put together a post that explains why Trump’s decision to dishonour our committment on the Iran deal is such a stupid move, and I have yet to be able to manage to say what I want to say coherently. However, when it comes to anything economic, my ‘go-to’ person is Erik Hare at Barataria, and tonight I found he had successfully accomplished what I’ve struggled with for two days. Not seeing much point in re-inventing the wheel when Erik has done such a great job, I am sharing his work with you. His explanations are concise and very understandable, and I urge you to take just a few minutes to read his excellent post. Thank you, Erik, for helping us all understand the total picture, and for your generous permission (given years ago) to re-blog!
Reblogged this on It Is What It Is and commented:
In a nut shell … “There is no doubt that Iran has been a rogue nation that needs to be brought into line. This deal should never stand alone as an end, but needed to serve as a staring point for Iran’s entry to the family of nations. Such an effort will take diplomacy and strength both. But we have neither as a result of this decision. Our word is shot, and our allies are not with us. We have lost.”
Sane, reasoned, rational. Bravo.
Concise, easy to understand, just what I need.
Erik, well done. I would add it was poorly planned, communicated and vetted. US State officials could not answer many basic questions as to what this all meant. Plus, everything is interconnected. We have US suppliers providing parts to EU manufacturers making things for Iran. Airbus has committed to 100 planes to Iran and has US suppliers and may need US banking funds. How does that work?
To me, the continual decline in trust of the US is disheartening. If I was a foreign leader, I would not believe a word this man says and the fact he cares little about relationships is telling. Keith
This is a very good analogy of the situation. And sums up the ninth reason ‘Trump decided to do it’
Thanks for a great post.
In addition to all of the above, I am concerned that Israel is running US foreign policy. Sheldon Adelson, a strong advocate for Israel and PM Netanyahu, just cut a check for $30 million dollars to help GOP US congressmen to help them with their reelection campaigns.
Rep Devine Nunes is Adelson’s man. Mr. Adelson’s friend Ms Safra Catz of Oracle is backing Devin Nunes all the way. She has recently had dinner with the president. Of course, none of this would have anything to do with the US House Speaker Paul Ryan continuing to back the likes of Rep Devin Nunes against the justice department.
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