May 7, 2019

Iran could step out of nuclear deal, leaving West little leverage

Iranian President Hassan Rouhani. Photo: Iranian Presidency/Handout/Anadolu Agency/Getty Images

Iranian President Hassan Rouhani is expected to announce Wednesday that Tehran may withdraw in whole or in part from the 2015 nuclear deal, potentially by resuming production of high-grade centrifuges for nuclear fuel and limiting inspections of nuclear facilities.

Why it matters: If Iran were to withdraw even partially from the deal, it could see its economy plummet further while military tensions with the U.S. ratchet up. Its internal power balance could also tilt more toward hardliners, who oppose any policies seen as accommodating the West.

Background: Since the U.S. withdrawal from the deal, Iran has counted on European states to pressure the private sector, especially oil companies, to find ways to circumvent U.S. sanctions and continue doing business in Iran.

  • But few large firms have been willing to risk violating U.S. law and being banned from the international banking system. As a result, Iran’s economy has taken a hit, with cash reserves depleting as oil exports fall 70%.

Between the lines: Iran has few cards left to play in the face of the U.S. "maximum pressure" campaign. If its actions prompt Europeans to re-impose sanctions, the West would have no remaining diplomatic leverage should Iran opt for military escalation, whether directly or through its proxies in Syria and Iraq.

  • Iran’s ongoing military activities across the Middle East — though not the priority of U.S. diplomacy under President Obama — present an arguably greater threat to U.S. regional interests than its possible development of a nuclear weapon. Trump and his cohorts, by contrast, have tried to focus on both threats at the same time.

What to watch: A shift in Iran’s compliance with the deal could give Trump ammunition with foreign governments that have argued for trusting Tehran. Should Iran decide to attack U.S. troops in the Middle East or ships in the Gulf, there would be even fewer states willing to come to its defense.

Geneive Abdo is a resident scholar at the Arabia Foundation.

Go deeper

The cost of going after Bloomberg

Illustration: Eniola Odetunde/Axios

Here's the growing dilemma for 2020 Democrats vying for a one-on-one showdown with frontrunner Bernie Sanders: Do they have the guts — and the money — to first stop Mike Bloomberg?

Why it matters: Joe Biden, Pete Buttigieg, Amy Klobuchar and Elizabeth Warren all must weigh the costs of punching Bloomberg where he looks most vulnerable: stop-and-frisk, charges of sexism, billionaire entitlement. The more zealous the attacks, the greater the risk he turns his campaign ATM against them.

How Trump’s economy stacks up

Source: "Presidents and US Economy", Trump figures through 2019 courtesy of Alan Blinder; Note: Data shows real GDP and Q1 growth in each term is attributed to the previous president; Chart: Axios Visuals

Average economic growth under President Trump has outpaced the growth under Barack Obama, but not all of his recent predecessors.

Why it matters: GDP is the most comprehensive economic scorecard — and something presidents, especially Trump, use as an example of success. And it's especially relevant since Trump is running for re-election on his economic record.

Coronavirus cases rise as 14 American evacuees infected

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

14 Americans evacuated from the Diamond Princess cruise ship tested positive for the novel coronavirus before being flown in a "specialist containment" on a plane repatriating U.S. citizens back home, the U.S. government said early Monday.

The big picture: COVID-19 has now killed at least 1,770 people and infected almost 70,000 others. Most cases and all but five of the deaths have occurred in mainland China. Taiwan confirmed its first death on Sunday, per multiple reports, in a 61-year-old man with underlying health conditions. Health officials were investigating how he became ill.

Go deeperArrowUpdated 2 hours ago - Health