From Bad To Worse: Trump’s Iran Strategy, Trade War Have Officially Spiraled Out Of Control

As of lunchtime in New York, the world had but a single tweet to go on when attempting to assess how Donald Trump is inclined to respond to news that Iran intends to violate a key element of the 2015 nuclear deal within days.

At 11:49 AM, the US president appeared to tweet a quote from a news article and, in a break with precedent, did not offer his take.

Indeed, sir. Indeed.

On Sunday, reports indicated Iran would make an important announcement this week and they did. In addition to warning that the country would soon breach stockpile limits on nuclear fuel, a spokesman for the country’s atomic energy agency said Iran will exceed a threshold on uranium enrichment meant to ensure Tehran doesn’t possess weapons-grade material.

“Today the countdown to pass the 300 kilograms reserve of enriched uranium has started and in 10 days time we will pass this limit”, Behrouz Kamalvandi told reporters at the Arak Heavy Water Reactor Facility Monday.

“This is based on the Articles 26 and 36 of the (nuclear deal), and will be reversed once other parties live up to their commitments”, he added. “One scenario is that we will define 3.67 for the Bushehr power station, which needs 5% [enriched uranium] or if we define for the needs of the Tehran Research Reactor, it will be 20%. Various scenarios have been envisaged.”

You can delve as far into the details and specifics of this announcement as you like, but the bottom line is that Trump’s decision to unilaterally undermine the landmark accord last year has compelled Iran to roll back its commitments.

This was entirely predictable. When Trump pulled the US out of the deal, he cited “nuclear blackmail”, despite the fact that all the evidence suggested Iran was complying with the letter of the accord. Now, 13 months later, Iran actually is resorting to “nuclear blackmail”, and openly so. The whole idea behind Monday’s announcement is to compel Europe to do more to ensure Iran’s economy isn’t crippled by US sanctions.

“This is an important test for Europe. It’s to their detriment that the US is making decisions for them”, Kamalvandi said. “Meetings and summits won’t suffice. Once they take actionable measures, we can return to our previous commitments”.

To be sure, Europe has taken steps to preserve the accord, including the bold maneuver to set up a special purpose vehicle to facilitate trade with Iran. But operating the scheme risks the ire of the US Treasury and could potentially deep-six trade talks with Trump. Late last month, Treasury’s undersecretary for terrorism and financial intelligence warned Instex (as the vehicle is called) that the SPV is exposed to US sanctions. As we’ve seen with Huawei and Hikvision, the Trump administration doesn’t differentiate between trade negotiations and other concerns (e.g., national security), which means it’s entirely possible that trade talks with Europe will get bogged down over NATO disputes and arguments about Brussels’ non-compliance with Iran sanctions.

It goes without saying that Mike Pompeo’s State department will use Monday’s announcement from Iran to bolster claims that the IRGC was behind last week’s attacks on oil tankers in the Gulf of Oman. Iran, on the other hand, continues to insist it was not behind the incident, and has variously characterized Trump’s decision to withdraw from the nuclear deal as yet another (and perhaps the most egregious) example of the administration’s penchant for undermining America’s international reputation and sowing discord in the service of Trump’s misguided view of international affairs.

Read more: Dangerous Waters: Trump, Iran On Conflict Crash Course

On Sunday, Pompeo told CBS that “We know [Iran’s] nuclear program accelerates if they have more money and wealth, if they have more capacity, more resources, they have access to metals and to materials and to fissile material”. That was yet another belabored attempt to suggest that although there was no evidence to support the contention that Iran wasn’t complying with the deal, the only way to be sure is to bankrupt the regime.

Instead, Trump has succeeded in irritating the Iranians to the point that Tehran is now prepared to simply violate the deal in a last ditch effort to convince Europe to talk some sense into the administration.

Of course, you can’t talk any sense into Trump and although he’s determined to avoid costly foreign wars (a campaign promise), John Bolton is one of the most ardent Iran hardliners on the planet. Throw in the fact that this White House is keen on turning the “friend-of-Israel” knob to the absolute max and Trump’s track record of doing anything and everything to please Saudi Crown Prince Mohammed bin Salman (including openly denying a CIA report which faulted Prince Mohammed for the death of Jamal Khashoggi and using the second veto of his presidency to block a congressional resolution which would have halted US support for the Saudi-led campaign in Yemen), and you’ve got a recipe for irrational decision making.

Meanwhile, back at Ponderosa, officials from more than 300 US manufacturers, retailers and trade groups descended on Washington like locusts Monday to weigh in on the prospect of tariffs on the remainder of Chinese imports.

Nearly 700 companies sent “Tariff Man” a letter last week begging him not to go ahead with the next round of duties. “We remain concerned about the escalation of tit-for-tat tariffs”, the letter reads. “We know firsthand that the additional tariffs will have a significant, negative and long-term impact on American businesses, farmers, families and the US economy”.

Right. And do note that although this is obvious to everyone from Joe farmer to Jane CFO, Wilbur Ross, Peter Navarro and Trump continue to insist that nobody is getting hurt or, if they are, that bailouts are the answer.

Monday marked the beginning of seven days of hearings, the fourth round of such proceedings since Trump started imposing tariffs on Chinese products last year.

As Bloomberg writes, the representatives gathered in Washington will, for the most part, all attempt to “drive home a now-common point: Trump’s proposed tariffs are bad for business.”

In case it’s not clear enough from the above, both the trade wars and the administration’s Iran strategy are now dangerously close to producing the worst-case scenario, which, in the former case involves a protracted economic cold war with Beijing, and in the latter case entails a shooting war with the IRGC.

Read more: The US Is Stumbling Towards Two Worst-Case Scenarios