Tensions Mount in U.S.-Iran Relations

by Mahsa Rouhi

As it warned, Iran on July 8 raised its uranium enrichment level above the 3.67 percent purity limit set in  the Joint Comprehensive Plan of Action (JCPOA). This is the second step in Iran’s plan to slowly scale back its commitments to the agreement while trying to force the remaining parties—the EU in particular—to provide for the sanctions relief called for in the deal. France, Germany, and the UK (the E3) criticized Iran’s decision as jeopardizing the agreement. This development adds to the risky steps on both sides that put the United States and Iran on the brink of war.

Iran’s decision to scale back on its commitments came after roughly one year of strategic patience wherein Iran complied with a deal the United States had broken. Back in May, Iranian President Hassan Rouhani declared that Iran would begin to scale back compliance to the JCPOA, following negotiations with remaining signatories that failed to bring about the deal’s promised economic benefits. As the United States continued its maximum pressure approach, international companies stayed out of Iran and alternative trade mechanisms. Particularly the EU’s special purpose vehicle (INSTEX), which proved to be too little too late. Later in May, Iran suggested that the remaining parties to the JCPOA facilitate ways for Iran to resume oil exports and use INSTEX for oil revenue transactions as well as the humanitarian goods.

On July 1, the International Atomic Energy Agency declared that Iran had increased its stockpile of low enriched uranium to 205 kilograms, which exceeded the JCPOA threshold of 202.8 kilograms (often expressed as 300 kilograms by weight as a compound). Although Iran’s measures are calculated and reversible, future steps grow increasingly risky as Iran’s enrichment levels rise and the stockpile grows. Possible next steps include increasing the number of installed centrifuges, adding more advanced models, reactivating the country’s Arak heavy water reactor, or further exceeding the enrichment level beyond 5 percent. All of these measures will reduce the country’s break-out capability, which over time would make a military strike by the United States or Israel more likely.

Tehran has a long history of using the nuclear issue as a strategic bargaining chip in the lead-up to negotiations. Today, it is doing so to try to relieve immense economic pressure. Moreover, as economic pressure mounts, there is domestic political pressure on President Rouhani to show strength and respond. Not only hardliners but public opinion in general is becoming increasingly impatient with the status quo and the strategic patience approach at a time when sanctions are mounting and Iran continues to comply with the nuclear accord.

Both the United States and Iran appear to be raising the stakes as an escalatory tactic to secure leverage in advance of possible negotiations. Iranian leaders are resorting to nuclear measures to build leverage to either salvage the JCPOA and reap its economic benefits or, in case the deal fails, have the upper hand in new negotiations with the United States. Measures like increasing uranium stockpiles and enrichment levels are effective bargaining chips because they are easily reversible in case negotiations ensue. Meanwhile, exceeding the enrichment limits breaks the stalemate Iran was facing. Iranian leaders assume that such a crisis, as risky as it may be, is the only force that can push Europe, Russia, and China to take action and provide Iran with sanctions relief. Nevertheless, they have been cautious not to cross an enrichment threshold that could trigger a military strike.

From Tehran’s perspective, Europe is in a position to sustain the deal. Iranian leaders demand that Europe live up to commitments made in the agreement. In a recent Twitter post, Rouhani addressed European leaders: “You’re saying that our compliance to the nuclear deal has gone from 100 percent to 98 percent. Well why don’t you start complying by 98 percent. Because right now your compliance isn’t even 10 percent.” If Europe took action to follow suit with China and defy U.S. sanctions, it could in fact foreclose the Trump administration’s current strategy.

However, Washington is misinterpreting Tehran’s strategic steps as a call to arms. National Security Advisor John Bolton stated in a tweet that “There is no reason for Iran to increase its enrichment unless it’s part of an effort to reduce the breakout time to produce nuclear weapons.” This statement highlights the deep misperceptions regarding the motives behind Iran’s announced enrichment measure. The Trump administration mistakenly believes that responding through a “maximum pressure” campaign will force Iran to alter its regional policies. In reality, Trump’s strategy is achieving the opposite. Since they lack a clear understanding of each other’s motivations, both countries risk triggering an unwanted war by attempting to boost their respective bargaining power.

Given the complexities of the nuclear issue as well as regional dynamics, the United States and Iran are engaging in an especially risky bargaining pattern. So far, Iran and the United States have tried to call each other’s bluffs. Iranian leaders believe that President Trump neither wants nor can afford to lead his country into another war in the Middle East. In turn, the United States thinks that Iran will not withdraw from the nuclear deal but will succumb to U.S. demands to renegotiate an agreement that addresses U.S. concerns. Either way, the more that Iran breaches its JCPOA commitments, the closer it gets to a nuclear break-out capability that would trigger a significant security threat for both sides. In such a scenario, tensions could easily get out of control and both sides could lose their bargaining leverage.

Yet, war is not inevitable. An exit-strategy exists.

First, the United States should view Iran’s nuclear escalation steps for what they are: a bargaining strategy. All signs from Tehran point towards this fact. Second, to ease U.S.-Iran tensions, there should be a grace period in which both sides refrain from further escalation, establish some bottom lines, and offer gestures of goodwill to kick start talks. Third, both sides need to clearly formulate reasonable demands.

The current U.S. demand for zero enrichment is a nonstarter. Before Obama’s 2013 compromise, the United States insisted on this demand for years without any success: enrichment just kept increasing. The experience of negotiating the JCPOA proved that there are ways to ensure all paths to a bomb are closed without insisting on zero enrichment as a demand.

The remaining parties to the JCPOA should find ways to convince the United States of the dangers of escalation and thus request waivers so that they can trade with Iran. This way they can meet Iran’s demands and fulfill their commitments to the accord to ensure Iran’s continued compliance. Alternatively, they should take a more proactive role in facilitating talks between the United States and Iran to constructively engage with each other on these issues.

Time is of essence. These nuclear measures are not a game changer now. But if they do not lead to talks, they create a crisis that brings Iran closer to a nuclear weapon capability and, likely, closer to a military conflict.

Mahsa Rouhi is a research fellow at the International Institute for Strategic Studies’s Non-proliferation and Nuclear Policy programme. She received her PhD from University of Cambridge, UK. Her research primarily focuses on Iran’s nuclear policy and security strategy.