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IRAN: US-Iran ties enter new period of brinkmanship

Table of Contents

  • Iran and the US seem determined to demonstrate to each other they are not desperate for a nuclear weapons agreement.
  • Iran may seek to hedge the destabilizing effects of its nuclear actions by lowering tensions with regional neighbors.

The Biden team came in convinced that their constructive approach to nuclear negotiations would win much more cooperation from the Iranians than the Trump team's confrontational one, yet the Iranians remained circumspect about once again striking an agreement that a US president could walk away from. The negotiating process broke off in June after six rounds, following Iran's presidential elections. It has not resumed, and it is not clear when it will resume.

The Iranians have reason for haste. Inflation is running more than 20% per year, and the currency lost 15% of its value in the two months after Ebrahim Raisi was elected president in June. Their economy shrank 12% in 2018-2019 and another 5% last year. The workforce is shrinking, and government revenues cover only 55% of planned spending. Sanctions are a big part of Iran's economic woes, blocking foreign investment and strangling Iran's international trade.

While many Iranians believe a revived nuclear agreement is necessary to stem the country's economic meltdown, the leadership fears being locked into an agreement that capitalizes on its current weakness. The Iranians have used the time since Biden's election to make significant progress in their nuclear program. They have begun manufacturing increasing quantities of uranium metal, for example, which can be used to make the core of a nuclear weapon. They also have been developing more efficient centrifuges to enrich uranium and have enriched to higher levels of purity than ever before. They have also blocked inspectors' access to some facilities, creating gaps in coverage that introduce enduring uncertainty about the Iranian program. The goal, it seems, is to avoid negotiations at a time when Iran perceives its own position to be weak.

The Biden team has always been reluctant merely to return to the previous nuclear deal. Its ambition was to negotiate for a “longer and stronger” deal that extended the sunset provisions of the JCPOA and remedied some of its weaknesses. Their bet had been that Iran's economic meltdown would force the Iranians to capitulate to new US demands, especially if those demands were relatively modest.

Now, the two sides seem to be drifting further apart. The Iranian side hasn't named a negotiating team following Raisi's victory, and it seems to be daring the IAEA to criticize it at the IAEA's board of governors meeting next week. Iranian officials have a record of threatening to abandon cooperation with the IAEA if it adopts a resolution critical of Iran. Iran, as it often does, is approaching a delicate diplomatic moment by being menacing rather than being on its best behavior.

Meanwhile, the United States is advancing a narrative that the window for a return to the JCPOA is closing. Speaking in Germany last week, Secretary of State Blinken said, “I'm not going to put a date on it, but we are getting closer to the point at which a strict return to the compliance with the (nuclear deal) does not reproduce the benefits that that agreement achieved.” The lead US nuclear negotiator, Rob Malley traveled to Paris and Moscow this week to coordinate with those governments on Iran policy prior to the IAEA board of governors meeting.

For each side, a large part of the equation is judging the other side's tolerance not to make an agreement. The US side has judged that Iran's economy –in the midst of one of the world's worst responses to the Covid-19 pandemic –creates urgency on the Iranian side. Yet, Iran has operated a “resistance economy” for decades. It has a far more robust industrial base than any of its neighbors, as well as a genuinely diversified economy. In addition, the population appears so exhausted by economic and political turmoil that the regime seems secure. After all, the regime heavily managed Raisi's election by barring any conceivable alternative from running, and while turnout was low, there were few overt protests.

Iran seems to be judging that the US commitment to the Middle East is diminishing, and the US government has little appetite for a full-scale confrontation with the Iranians. They may also judge that the disarray conveyed by the US withdrawal from Afghanistan will, at least for a time, diminish the US ability to rally partners to its side.

Part of the Iranian thinking also may be to invest in lowering regional tensions as a way of lowering international pressure on Iran. It is unclear that the newly named Iranian foreign minister, Hossein Amir-Abdollahian, will have responsibility for nuclear negotiations, but he has a wide circle of Middle Eastern relationships from his previous diplomatic postings. His appearance at a summit in Baghdad two weeks ago got cautiously positive reviews from Gulf ministers attending. His presumed connections to the Iranian Revolutionary Guard Corps, which is responsible for many of the activities neighbors worry about, suggests to them he may be able to deliver on his promises. His behavior drew attention, as well. On the positive side of the ledger, he addressed them in Arabic; more worryingly, in the “family photo” for the event he asserted himself in the line among heads of state rather than among fellow foreign ministers.

While it is early to say, the Iranian government may be betting that more cooperative behavior on regional issues–including Yemen, Iraq, Syria, and Lebanon–could buy time to make irreversible progress on its nuclear program and blunt any US government efforts to rally international pressure against Iran. For its part, the US government is clearly exploring ways of increasing pressure on Iran, although its options are limited because of extensive efforts to do so under the Trump administration, and rising Sino-US tensions may make shutting down Iranian oil sales to China harder than it has been in the past.

The Biden administration seems much more reluctant to use force against Iran than its predecessor. However, Israel continues to feel an existential threat from Iran, and it may be losing confidence in the US ability to contain the Iranian threat. While the threat of war may be relatively low, the threat of unexpected developments is rising.

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IRAN: US-Iran ties enter new period of brinkmanship

Iran and the US seem determined to demonstrate to each other they are not desperate for a nuclear weapons agreement. Iran may seek to