Daily Management Review

Why Is U.S. Pulling Out Of The Iran Deal A Big Deal For The World


Why Is U.S. Pulling Out Of The Iran Deal A Big Deal For The World
There can be wider ranging global implications – from the price of oil to Iran’s nuclear programs and ambitions, by the pulling out of the Iran nuclear deal by United States president Donald Trump.
The diplomatic relations between the U.S. and a number of its key allies could be strained because of the decision of Trump. Relationships between the U.S. and some of its key friends in the European Union – such as Germany, France and the United Kingdom, is already strained because of Trump’s tariffs and these countries have been partners in the Iran deal.
President Trump have been urged in recent times not to pull out of the Iran nuclear deal by French president Emmanuel Macron and British foreign secretary Boris Johnson. The Iran deal was created and led by the former U.S. president barrack Obama. His disappointment at Trump’s decision was tweeted by macron on Tuesday. The Iran deal is formally known as the Joint Comprehensive Plan of Action.
"France, Germany, and the UK regret the U.S. decision to leave the JCPOA," Macron said in a tweet. "The nuclear non-proliferation regime is at stake."
The deal resulted in some countries such as Russia and China slowly lifting sanctions against Iran as Tehran remined committed to the terms of the deal – which included allowing regular international inspections.
This is however not the only occasion that Trump had irritated U.S. allies. The EU partners of the U.S. are miffed by the 25% tariffs on foreign steel and 10 percent tariffs on import of aluminum in to the U.S. was one such instance.
The decision to pull out of the Iran deal is a "serious mistake", said Obama on Trump’s decision.
There can also be ripple impacts in the global oil market since Iran is the third largest producer and member of OPEC. The amount of crude that would fluctuates in the world market in the next few weeks because of the decision of Trump and the re-imposition of sanctions on Iran by the U.S. is yet to be seen even though there has been a sharp rally in the Brent crude prices in recent days on the conjecture of new sanctions on Iran. 
The U.S. Treasury Department has attempted to calm fears by saying that the possible re-imposition of sanctions on Iran would depend on 90-day and 180-day wind-down periods.
"President Trump has been consistent and clear that this Administration is resolved to addressing the totality of Iran's destabilizing activities," said Treasury Secretary Steven Mnuchin. 
"We will continue to work with our allies to build an agreement that is truly in the best interest of our long-term national security."
Further, the nuclear program of Iran would could be left in the lurch be Trump’s decision. The agreement with the United States would be effectively dropped by the refusal of the U.S. to lift sanctions even without any proof that Iran had violated the deal.
Iran did not plan to take any measures top counter Trump’s decision, said Iranian President Hassan Rouhani despite the U.S. withdrawing from the deal according to Reuters.