By Hanif Ghaffari

U.S. and European Troika's bargain over JCPOA

June 20, 2018 - 10:34

TEHRAN - The U.S.-EU conflict over the United States announced tariffs on steel and aluminum imports from Canada, Mexico and the EU has entered a new phase. The tariffs, which took effect from Friday, will end a two-month exemption for the U.S. allies. Accordingly, Jean-Claude Juncker, President of the European Commission said:

"This is a bad day for world trade. We will immediately introduce a settlement dispute with the World Trade Organization (WTO) and will announce counterbalancing measures in the coming hours". Then he added: "It is totally unacceptable that a country is imposing unilateral measures when it comes to world trade."

 In a statement that revealed his anger at Donald Trump, French President Emmanuel Macron also called the White House's decision to increase  tariffs on steel and aluminum import "illegal," announcing retaliatory measures with "a determined and appropriate response" following U.S. decision. He said he will soon speak with U.S. President, warning that the move could close the door on other talks.

However, we aren't about to analyze Trump's protectionist policies and how those affected the international trade. What matters to us here is that how the "American-European trade war" is going to affect the Joint Comprehensive Plan of Action (JCPOA).

An article was published in "Watan-e-Emrouz" daily in late August. The author was arguing why we, as Iranians, can't trust the "European JCPOA", and he warned about Europe bargaining over the nuclear deal with the United States. Part of this article reads:  

"Many Western analysts has deliberately chosen to ignore the parallel relations existing between the two issues of" Trump's withdrawal from the JCPOA "and" imposing tariffs on imported steel and aluminum from Europe." There is little doubt that the European authorities are engaged in a "bilateral deal" with Trump: that the President of the United States, in exchange for a reduction in the economic pressure on Europe (including the exemption of imported steel and aluminum tariffs), is going to enjoy the maximum support of the European troika and even the European Union against the JCPOA…"

Although Western media and senior U.S. and European officials had intended to conceal "the hidden deals" over the JCPOA and its relation with the above conflict, until the White House officially announced the decision to impose tariffs on steel and aluminum. But now this connection is publicly discussed by Western sources. Bloomberg writes in this regard:

“Trump’s hope seems to be that the threat of tariffs gives him leverage to get the cooperation he wants on European defense spending and sanctions on Iran. U.S. Treasury Secretary Steven Mnuchin recently told CNBC, the U.S. cable news network, that President Trump would factor military contributions to NATO into the application of a 25 percent tax on imported steel and 10 percent on aluminum.”

It continues: “The implication was that the U.S. would climb down from its threat to impose steel and aluminum tariffs so long as EU countries keep their promises, made at the 2014 NATO Summit in Wales, to increase their defense spending to 2 percent of GDP. Since Trump is also threatening the EU with tariffs on imported cars, he might be willing to bargain those away too for more European defense spending.”

The United States are playing a simple game with the United Europe! In this way, Donald Trump seeks to "manage the international behavior" of the EU leaders. In this equation, Trump don’t care the least for "Macron’s loud shouts" and "Merkel's threat”! The President of the United States has set up a new deal before his European allies. With this measure, Trump increases his popularity with his supporters (who advocate protectionist policies) and, on the other hand, decreases the European Union maneuverability over issues such as the JCPOA and NATO’s military budget. Although European authorities have pretended to be "shocked" by Trump’s decision, the reality is something else:

During the visit of German Chancellor Angela Merkel and French President Emmanuel Macron to the United States, Trump informed the two European politicians about his two important decisions, namely his government "withdrawal from the nuclear deal" and "the introduction of tariffs on steel and aluminum". Following the U.S. official pull out of the JCPOA, tense and secret discussions began between the U.S. Department of State and European diplomats was on these two issues; negotiations that despite Trump’s announcement to impose tariffs on imported steel and aluminum are continued. In other words, Trump’s recent move is neither the "beginning" nor the "end" of an economic and diplomatic process with the European authorities, but the middle of the two. From now on, European and American diplomats will continue their intensive talks on two issues: “JCPOA" and "imposition of tariffs". In their negotiations, both issues are to be discussed together and “in the same package”. Obviously, in this equation, we shouldn’t be waiting for" Europe’s firm resistance against the United States "!
The "conservatism of the European authorities" and "the European troika’s inclination to surrender to Washington" were two components that let Trump announce his recent economic decision. If the president of the United States and his companions expected the least "resistance" by Europe, they would not basically make such a decision. Trump's recent decision, more than being a measure for fulfilling his electoral promises, confirms the low level of "European authority" in the international system. This indicates that even before his “key allies”, Trump is willing to make use of the White House's "punishing power", and that "encouragement" and "persuasion" don’t play any roles in his decisions in the field of foreign policy and economics.

Finally, the transatlantic trade dispute is considered a warning for the survival of the JCPOA. "Beyond the artificial protests we are witnessing, Europe is preparing for holding talks with the Americans. Obviously, under such circumstances, counting on the Europeans for salvaging the JCPOA is but a strategic mistake. Undoubtedly, in the coming days, European officials will formally announce that there is no connection between the two issues of "negotiations with the United States over the imposed tariffs" and "negotiations regarding the JCPOA", but this claim is certainly in contradiction with the “once a secret” U.S.-EU negotiations.