US President Donald Trump. Picture: REUTERS
US President Donald Trump. Picture: REUTERS

Washington — President Donald Trump said on Tuesday he was reimposing economic sanctions on Iran and pulling the US out of an international agreement aimed at stopping Tehran from getting a nuclear bomb.

The decision is likely to raise the risk of conflict in the Middle East, upset European allies of the US and disrupt global oil supplies.

“I am announcing today that the US will withdraw from the Iran nuclear deal,” Trump said.

“In a few moments, I will sign a presidential memorandum to begin reinstating US nuclear sanctions on the Iranian regime. We will be instituting the highest level of economic sanctions.”

He said that any country that continued to support Iran also risked the imposition of US sanctions.

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The 2015 deal, worked out by the US, five other international powers and Iran, eased sanctions on Iran in exchange for Tehran limiting its nuclear programme. Trump has said that the agreement — the signature foreign policy achievement of Trump’s predecessor Barack Obama — did not address Iran’s ballistic-missile programme, its nuclear activities beyond 2025 or its role in conflicts in Yemen and Syria.

Iran has ruled out renegotiating the agreement and threatened to retaliate if Washington pulled out, although it did not say exactly how.

Renewing sanctions would make it much harder for Iran to sell its oil abroad or use the international banking system.

Iranian state television said on Tuesday that Trump’s decision to withdraw from the nuclear deal was “illegal, illegitimate and undermines international agreements”.

The Iranian ambassador to SA said he hoped that Trump’s decision to withdraw from the nuclear deal would not affect the relationship between SA and Iran. Previously‚ sanctions imposed on Iran by the US saw a massive decline in trade between the two countries. Oil sales were hit particularly hard.

In 2004‚ according to StatsSA‚ SA had bought 8-million tonnes of crude oil from Iran and the country was the third-biggest exporter of oil to SA in 2011.

French President Emmanuel Macron said his country would work on a broader agreement covering Iran’s nuclear activity, ballistics programme and regional activities.

“We will work collectively on a broader framework, covering nuclear activity, the post-2025 period, ballistic activity, and stability in the Middle-East, notably Syria, Yemen, and Iraq,” Macron said on Twitter.

Oil prices initially slumped on conflicting headlines, rebounded after Trump’s announcement and then sold off again at the close.

Equities were volatile, but remained modestly lower on the news, while the dollar pulled back against other major currencies.

Reuters and TimesLIVE

 

Trump said in a tweet on Monday that he would announce his decision at 2 pm Tuesday in Washington, ahead of a May 12 deadline set by US law to continue waiving US sanctions lifted by the accord.

Oil prices have climbed in recent weeks as uncertainty over the future of the agreement rose. A resumption of US sanctions would threaten Iran’s ability to attract foreign investment, keeping the country’s output flat or lower through 2025, according to a research note published Monday by Barclays.

It is unclear what may unfold after Trump’s announcement. American and European diplomats have sought to negotiate side agreements aimed at addressing his concerns about the deal. Even the immediate reimposition of sanctions would take time to resolve, as there would be no accounting of violations before November, according to the Congressional Research Service.

Russia’s ambassador to the International Atomic Energy Agency, Mikhail Ulyanov, said the Iran deal would not end immediately as a result of Trump’s action and “we will have a certain amount of time for diplomatic efforts”, according to the Interfax news service.

Last-ditch efforts

Diplomats engaged in the talks on side deals had signalled that they were close to a breakthrough, but key allies have been sceptical that Trump would remain part of the current pact, which curbs Tehran’s nuclear programme in exchange for relaxing Western financial sanctions.

French President Emmanuel Macron and German Chancellor Angela Merkel signalled after meeting with Trump last month that he seemed intent on quitting the agreement.

Ali Shamkhani, secretary-general of Iran’s Supreme National Security Council, was reported to say Tuesday that “if the US initiates confrontation with Iran, we won’t stay passive”.

If the nuclear agreement “gets destroyed due to the US assault, for sure it won’t be to their benefit”, he said, adding that the “biggest loss will be for the Europeans.”

EU trade with Iran has nearly tripled since 2015.

Following the visits by Merkel and Macron, UK Foreign Minister Boris Johnson was in Washington this week to make a last-ditch argument to persuade Trump to remain in the accord, arguing that it is flawed but can be improved by the side agreements.

Johnson met this week with Vice-President Mike Pence, National Security Adviser John Bolton, Secretary of State Mike Pompeo and other administration and congressional officials.

Trump foreshadowed his decision on Monday, complaining on Twitter about the Iran agreement and deriding former Secretary of State John Kerry for meeting with Iranian Foreign Minister Javad Zarif two weeks ago at the UN to discuss salvaging the deal. “He was the one that created this MESS in the first place!” Trump said of Kerry.

Saturday deadline

Under legislation passed by Congress, Trump has until Saturday to decide whether to keep waiving sanctions on banks of foreign countries that have not reduced Iranian oil imports, according to an analysis by the Congressional Research Service. Under that law, those sanctions have to be waived every 120 days.

Trump last agreed to waive the sanctions in January, but his frustration with the agreement has only grown since then. Declining to waive the restrictions again means an assessment of whether foreign countries are violating the sanctions would be due November 8, according to the CRS study.

Israeli Prime Minister Benjamin Netanyahu said on Sunday that the 2015 accord is fatally flawed and must be “fully fixed or nixed” to stop Iranian aggression sooner rather than later. His comments came as Iranian President Hassan Rouhani warned that the US would face “historic” regret if it pulled out.

Netanyahu’s role

Netanyahu delivered a televised presentation last week on secret Iranian files his country’s intelligence services obtained that he said prove that Tehran sought to build a nuclear weapon in the past despite its government’s denials. Trump watched the presentation, and White House Press Secretary Sarah Huckabee Sanders issued a statement declaring that the Israeli intelligence proved “Iran has a robust, clandestine nuclear weapons programme.”

The White House later corrected the statement online to say Iran “had” a nuclear programme, blaming a clerical error. Netanyahu did not claim that Iran currently has a nuclear programme.

Members of Trump’s own party are split.

Bloomberg

 

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