Before Maximum Pressure, Trump Needs an Iran Strategy

Maximum pressure is back according to Brian Hook, who served as Iran policy lead during the first Trump administration and is now heading the State Department transition team for the next term. But to what end?

Biden's Record

Maximum pressure never actually went away as a legal matter—the Biden administration maintained existing sanctions on Iran and then built them up in some ways, such as issuing new individual sanctions and expanding the scope of President Trump’s Executive Order 13902 to target a broader array of oil-related trade. From that perspective, U.S. sanctions on Iran have never been more comprehensive than they are today.

At the same time, however, a combination of Iranian evasion and lackluster U.S. enforcement have enabled the regime to increase its oil exports and currency reserves over the past few years. The Biden administration has not offered an explanation as to why. Moreover, Treasury Secretary Janet Yellen noted in March 2023 that the administration’s approach to sanctions had not changed Tehran’s destabilizing behavior.

Two main factors help explain the Biden approach and may influence Trump’s approach as well:

1. Tightening oil sanctions against Iran would have conflicted with the U.S. drive to strengthen sanctions against Russia (implemented in response to the invasion of Ukraine, among other violations) and enforce existing sanctions against Venezuela (for human rights violations). The Biden administration made no secret of its concerns that further constraining international oil supply by taking Iranian crude off the market would pose risks to the global economy.  
2. Expanding Iran sanctions risked provoking the regime to intensify its nuclear activities. During indirect talks via Oman over the past year or so, U.S. and Iranian officials reportedly discussed an understanding on potential steps to avoid escalation, one of which included holding back on oil sanctions.

In short, Biden’s team saw much risk and no benefit from intensifying macro-level sanctions against Iran. The administration was willing to announce new individual designations and sanctions targets, but it did not embrace sanctions as a major policy tool.

The Trump Plan

Regardless of how one judges Biden’s Iran policy, Trump’s nascent plan merits scrutiny. Hook has made clear that maximum pressure will be the new administration’s tool of choice, but he did not enunciate the objective of this pressure. He did disavow regime change as a goal, though the transition process has just begun and other members of Trump’s national security team may have different views.

Other than regime change, maximum pressure could plausibly contribute to two goals: some kind of new deal with Iran, or containment. U.S. pressure could be a useful tool for achieving either outcome, but its actual efficacy will depend on how it is wielded and with what level of international support—especially if a more assertive enforcement posture creates an oil market crunch. The Trump team also needs to consider how it will respond to potential Iranian retaliation, which has recently included attacks on U.S. targets in the Middle East and partner oil export capacity.

A New Deal?

During the first Trump term, U.S. officials stated their intention to pursue an Iran deal that drastically improved on the 2015 nuclear deal (i.e., the Joint Comprehensive Plan of Action, or JCPOA). This could be the next administration’s objective as well, but it will be difficult to achieve. Iranian concerns over Trump’s potential return to office were a core reason why the Biden administration failed to conclude a mutual return to JCPOA compliance in 2021-22. Tehran’s reticence extended to other arrangements as well—the regime refused to consider various deals with a U.S. government that it did not trust to fulfill agreed terms over the long run.

Of course, Trump will arguably be less inclined to tear up any new deals his administration negotiates, which could help convince Tehran to try. Moreover, Iran’s present strategic position could be more favorable for negotiations. For one, the regime’s nuclear program has achieved very significant technical milestones since Trump withdrew from the JCPOA in 2018. These advances would be difficult to reverse through negotiations, making Tehran more confident about holding its ground during future talks. Even points that would notionally argue against a deal—such as Iran being in a weaker position regionally after Israel’s evisceration of Hezbollah and Hamas—could actually facilitate wide-ranging talks. Although accepting U.S. restrictions on support for these groups would be costly to Tehran politically, the regime might privately welcome a financial reprieve from funding them for the time being, since it would essentially have to start from scratch again.

Getting to a deal would still be very difficult, however, for several reasons:

• Since as early as 2013, Tehran has maintained that it will not negotiate on non-nuclear matters, and it has insisted that the JCPOA is as far as it would go. It maintained that stance even during the first Trump administration’s maximum pressure policy.
• Any deal that extends to Iran’s regional activities would be contentious and difficult to verify.
• A max pressure campaign is unlikely to generate substantial leverage before Iran is technically able to cross the nuclear weapons threshold. Although estimates vary as to how far the regime is from that threshold, it could enrich enough weapons-grade material for one or more bombs in as little as one to two weeks, either at an existing declared facility or after a sudden diversion to an undeclared facility. (Much of the variation in estimates stems from uncertainty over how close the regime is to designing and manufacturing a viable weapon, not its production of sufficient fissile material.) Choosing the geopolitically risky weapons path would not be easy for Tehran, despite its recent brash rhetoric on the matter. But this scenario is far more plausible today than when max pressure began in 2018.
• If the next administration views max pressure as a longer-term option for pulling Iran back to the negotiating table gradually rather than immediately, it will have to account for the fact that this policy could take nearly a million barrels of oil per day off the market—a scenario that would drive up global prices unless additional supply is added. OPEC countries may be disinclined to provide more oil, as markets are presently bearish and prices down. In theory, Trump could demand sanctions relief for Russia to replace lost Iranian supplies, but the structure of U.S. sanctions laws toward Moscow would make that difficult. Moreover, sanctions relief for Venezuela seems unlikely absent a change in its regime.

Containment

Ultimately, these obstacles may redirect the Trump team to a de facto approach of containment via sanctions pressure, perhaps accompanied by continued U.S. support for Israeli military operations against Iran and/or its proxies. Such a sanctions campaign could focus on reducing Tehran’s capacity and willingness to support a reboot of Hezbollah and Hamas. It might also strain the regime’s ability to provide military support to Russia, rebuild its domestic air defenses reportedly destroyed by recent Israeli counterstrikes, and manage the still-restive Iranian population. Moreover, this campaign would use many of the same sanctions measures envisioned under a deal-seeking scenario, but the goal would be simpler: to impose costs that make it hard for Iran to destabilize the region.

Of course, even a more limited containment strategy would raise dilemmas:

• It would not constrain Iran’s ability to stage a nuclear breakout—as noted above, the regime could execute this move at the very start of a new max pressure campaign, or even before Trump takes office if it believes such a campaign is inevitable.
• It would lack a key incentive supporting the previous incarnation of max pressure: the stated objective of reaching a new deal with Iran. Sanctions in service of diplomacy has been a central U.S. message since 2005, both to Tehran and as justification to other governments—something that would be essential if sanctions worsen Iranian economic data and portend a humanitarian crisis. In the past, U.S. partners understood that if a deal was reached, sanctions would be removed, giving them more incentive to complement U.S. sanctions with their own measures. An open-ended commitment to containment could prove more difficult to sustain—such was the case with Iraq in the 1990s as humanitarian concerns grew, and Iran has stronger relationships with Russia and China than Saddam Hussein did, giving it more leverage to undermine sanctions.

To make containment more palatable, the Trump administration could focus its pressure campaign on efforts that limit Tehran’s ability to cause regional harm without encouraging escalation. Yet such a campaign would be closer to Biden’s approach, with all the same drawbacks.

One way to address this dilemma and secure greater international buy-in would be to clarify the benefits of Washington’s policy. For example, under sanctions-based containment, Iran would have fewer resources available for supporting the reconstruction of Gaza and Lebanon—and, by extension, advancing its political interests there. Displacing Iranian influence through a combination of U.S., Arab, Israeli, and European reconstruction support would represent a significant geopolitical coup, especially if accompanied by political changes that improve governance in Lebanon and the Palestinian Authority.

Conclusion

With regime change ostensibly off the table for now, there is a yawning need for the incoming administration to describe what end state it seeks with Iran and build international support for this policy. Sanctions-based strategies only work when they support policy rather than displace it. The Trump administration should first consider how sanctions fit into U.S. strategy in the Middle East before talking about how to get them going again.

Richard Nephew, an adjunct fellow with The Washington Institute, formerly served as the State Department’s coordinator on global anti-corruption and deputy special envoy for Iran.