In late 2016, when Donald Trump was elected US president, it seemed logical that he would withdraw from the Iran nuclear deal.
After all, he had repeatedly condemned the deal as the worst in US history and explicitly campaigned on the promise that he would scrap it. Iranian bankers, whose hopes for the normalization of their country’s financial sector relied on the survival of the international agreement, found the news ominous, although outwardly they tried to appear optimistic.
One hope remained for Iran. If Trump, a businessman first and foremost, could be shown that the US would benefit economically from the nuclear deal, he may decide to keep it. To this end, in the final months of his administration, Barack Obama sought to buttress the deal by issuing licences to US companies wishing to work in Iran in the hope that it would tie profits and jobs in the US and ease tensions with the Islamic Republic.
As Iran’s central bank governor Valiollah Seif told Euromoney after Trump’s election: “It seems that the American side is not motivated enough, do not have enough incentives. Maybe it is because, economically, they are not benefiting from the JCPOA [Joint Comprehensive Plan of Action] as much as the Europeans are.”
In the final reckoning, the commercial ties between the US and Iran – which included a contract for Boeing passenger jets – were not enough to change Trump’s mind. In March this year he appointed a new secretary of state known to be opposed to the deal, Mike Pompeo, to replace the more conciliatory Rex Tillerson.
In May, Trump finally abandoned the accord. And in late June the US Treasury’s Office of Foreign Assets Control revoked the general licences that were issued in connection with it allowing certain transactions relating to foreign entities owned or controlled by US persons and certain transactions relating to the export of commercial passenger aircraft to Iran.
The other deal signatories – China, France, Germany, the European Union, Russia, the UK and Iran – officially remain committed to upholding their end of the bargain. But that will not mitigate the disastrous effects of the US withdrawal. International banks, which were already wary of dealing with Iran under Obama because some US sanctions were still in place, have for the most part decided to avoid Iran for the foreseeable future.