A reluctant President Trump has decided to issue another waiver of Iran oil sanctions as well as other various sanctions required under the Iran nuclear deal but will warn it will be the last waiver unless the agreement is changed to address his concerns.
In addition, the Treasury Department will also announce new sanctions on individuals and entities in Iran.
A background briefing for reporters will be held by the State Department at 12:45pm today, and the embargo on the official announcement will be lifted at 1:30 PM.
Several news organizations have already reported about the expected decision but the announcement is more nuanced that a simple waiver extension.
As we wrote in a note earlier this week, Trump’s decision will set up a showdown at the next waiver deadline on May 12.
In our view, it is unlikely that Congress or the Europeans will take any meaningful action to modify the agreement. As a result, there is significant risk of snap-back oil sanctions on Iran and the nuclear deal remains on life support.
Trump had been leaning against issuing another waiver but relented after intense lobbying by his national security advisers to give Congress more time to fix what the President views as flaws in the deal.
All of this reminds us of a similar scenario from July 2017 to convince Trump to recertify the Iran deal. A national security meeting turned into an all-day lobbying effort by his advisors with Trump only relenting by requiring a plan to decertify at the next deadline in October.
We are told that Trump is very frustrated that Congress had not taken any action since he first decertified the deal in October and is skeptical about assurances of new momentum for a legislative initiative.
Trump detests that he has to put his personal stamp of approval on a deal he views as “terrible.” Under US law the President must make a decision to waive Iran sanctions every 120 days in order for the US to keep its commitment under the Iran nuclear deal.
The President will also decertify the deal again, a statutory requirement every 90 days, and thus provide Congress with another two-month window to consider legislation to make changes to the agreement on an expedited timetable and not subject to a Senate filibuster.
We expect that there will be considerable criticism of Trump’s decision to extend the waiver again by conservatives opposed to the Iran deal. Senator Ted Cruz (R-Texas) on Thursday said that “waiving the sanctions on the ayatollah while protesters are dying in the streets would be a serious mistake.” The National Review had urged Trump to “kill the Iran nuclear deal.”
Meanwhile, Senate Democrats have not to date been cooperative about passing legislation to modify the Iran deal sought by Trump and his congressional allies by addressing the agreement’s sunset provisions or ballistic missile program.
The effort over the last few days to get support from Senator Ben Cardin (D-Maryland), the ranking member of the Senate Foreign Relations Committee, for a watered-down version of a bill has only generated opposition from some Republicans previously open to a legislative fix.
As a result, the legislative effort for an Iran deal fix that Trump is seeking now begins at a stalemate and faces significant challenges for any success.
