Balance of Power: Trump's Iran nuclear deal announcement explained

08 May 2018 - 20:17 By Bloomberg
US President Donald Trump.
US President Donald Trump.
Image: USA-NUKES/PLUTONIUM REUTERS/Carlos Barria/File Photo

The prevailing view is that President Donald Trump will announce he’s walking away from the Iran nuclear accord today in Washington. What comes next isn’t so clear. Here are four possible outcomes:

1. The deal holds: For now. Europe and Iran agree to stick by its terms and hope that the next president isn’t Trump. Thiswould face major challenges— Iran’s economy is struggling and European companies would risk falling foul of America’s punitive measures.

2. The fudge: In a twist, Trump says the deal isn’t working and accuses the Iranians of being in breach of its terms. He sends the issue to dispute resolution, and eventually, the UN Security Council. It may be worst-case scenario for Iran as it could see the US destroy the deal from within, reinstating penalties without officially abandoning it. The US couldpaint Iran as the guilty party.

3. The head scratcher: Trump says something no one really understands. He reiterates his intention to leave the deal, but says nothing about sanctions or the process of exiting. Could countries get exemptions? What about industries? It’s loose strings and open ends for everyone.

4. R.I.PJCPOA: Trump exits the deal and slaps Iran with punitive measures. Secondary sanctions also kick in, sending European companies fleeing. Angered Iranian hardliners push the boundaries of the country’s nuclear activities, and tilt further to Russia and China, setting them on a collision course with the US, Israel and Saudi Arabia.