Updated May 12, 2018

Without Iran deal, U.S. sanctions tool will lose force

President Trump announcing his withdrawal from the Iran deal at the White House on May 8, 2018. Photo: Xinhua/Ting Shen via Getty Images

In quitting the Joint Comprehensive Plan of Action (JCPOA), President Donald Trump may have thought he could now subject Iran to “extreme pressure” from resumed U.S. secondary sanctions. But the outraged response of countries ordered to wind down their commerce with Iran within the next six months suggests that the U.S. sanctions weapon could become a boomerang.

The big picture: May 8, 2018, may soon become as infamous as March 20, 2003, when the U.S. invaded Iraq against the advice of many of its allies (especially France) and Mideast experts. In leaving the deal despite Iran's compliance, Trump has antagonized the rest of the world and undermined sanctions as a tool of diplomacy.

The background: Longstanding U.S. efforts to depress foreign investment in and trade with Iran have had a mixed record and only really became successful from 2006 to 2014. The effort took off when Iran, under an aggressive and often obnoxious president, Mahmoud Ahmadinejad, accelerated the country’s nuclear program while also denying the Holocaust and assisting attacks on U.S. forces in Iraq.

Sanctions reached a high point in 2012, when Israel was threatening to bomb Iran and the Obama administration married sanctions with a robust diplomatic strategy. That effort bore fruit in 2015 with the conclusion of the JCPOA and the U.S. agreement to lift nuclear-related sanctions in return for Iran's compliance with verifiable curbs on its nuclear activities.

The bottom line: Many companies will bow to fear of massive fines and quit or avoid the Iranian market. But others, particularly in China and Russia, will find ways to continue to do business with Iran as long as it remains faithful to the JCPOA. The sanctions that President Trump seeks to wield with Thor-like vigor will shrivel and U.S. diplomacy will lose a once-potent tool.

Barbara Slavin directs the Future of Iran Initiative at the Atlantic Council.

Go deeper

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 2:30 p.m. ET: 1,506,936 — Total deaths: 90,057 — Total recoveries: 340,112Map.
  2. U.S.: Total confirmed cases as of 2:30 p.m. ET: 432,596 — Total deaths: 14,831 — Total recoveries: 24,235Map.
  3. Federal government latest: President Trump is preparing to launch a second coronavirus task force focused on reviving the U.S. economy.
  4. Public health latest: U.S. has expelled thousands of migrants under coronavirus public health orderDr. Anthony Fauci said social distancing could reduce the U.S. death toll to 60,000.
  5. Business latest: The Fed will lend up to $2.3 trillion for businesses, state and city governments — Another 6.6 million jobless claims were filed last week.
  6. World update: Boris Johnson is moved out of ICU but remains in hospital with coronavirus
  7. 🎧 Podcast: Your hydroxychloroquine questions answered.
  8. What should I do? Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Boris Johnson moved out of ICU but remains in hospital with coronavirus

Johnson last December. Photo: Kate Green/Anadolu Agency via Getty Images

U.K. Prime Minister Boris Johnson has been moved out of intensive care but is continuing to be monitored at St. Thomas' Hospital in London, according to a Downing Street spokesperson.

Why it matters: It's a sign of improvement after Johnson spent three nights in intensive care for coronavirus. Foreign Secretary Dominic Raab remains in charge of the government.

Go deeperArrow14 mins ago - World

A pause button for debts

Illustration: Aïda Amer/Axios

Governments have forcibly put much of the U.S. and the global economy on pause in recent weeks, for very good reason. Factories, offices, sporting arenas, restaurants, airports and myriad other institutions have closed down. But one thing hasn't been paused: monthly debt-service obligations.

The big picture: The less movement and activity there is in an economy, the more the coronavirus curve is flattened. But the obligations in bond and loan contracts can't be paused. That's worrying CEOs who fear a wave of business failures if economic activity doesn't pick up next month.