TSG IntelBrief: The Trump Administration Takes Aim at Iran
February 2, 2017

The Trump Administration Takes Aim at Iran

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Bottom Line Up Front: 

• Iran’s inclusion on the list of seven banned countries in U.S. President Donald Trump’s executive order on immigration will impede U.S.-Iran relations, but is unlikely to derail the multilateral nuclear agreement.

• Iran was included in the order because it is on the U.S. State Department’s list of state sponsors of terrorism and is considered a key adversary by the new administration.

• Iran is an outlier on the list of seven countries because it is the only one that has never had a significant number of Islamic State or al-Qaeda-affiliated militants operating within its territory.

• The key concern for Iran’s leadership is that inclusion on the U.S. ban list will cause major foreign firms to stay out of Iran, thus hindering the country’s recovery from years of international sanctions.

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While the Trump administration’s recent executive order on immigration has received significant attention, Iran’s inclusion on the list of seven Muslim-majority countries whose nationals are temporarily banned from traveling to the U.S. merits particular attention. Of the seven countries listed in the ban, Iran, Syria, and Sudan have long been named on the U.S. list of state sponsors of terrorism. These countries were expected to be subjected to any immigration restrictions the Trump administration would propose, on the grounds that a state sponsor might try to infiltrate terrorists into the United States. Iran supports a wide range of militant groups in the region, including Lebanese Hizballah, several Iraqi Shi’a militia groups that have killed American soldiers deployed in Iraq, and several Palestinian militant organizations, including Hamas. In 2011, the Obama administration said it had foiled an Iranian plot to assassinate the Saudi Ambassador to the United States at a location in Washington, D.C. The plot revived U.S. fears of Iran’s substantial terrorism capabilities and exposed Iran’s willingness to sponsor attacks even in the United States itself. The Trump administration clearly views Iran as a significant strategic adversary of the U.S., moving sharply away from the Obama administration’s consideration of Iran as a potential partner in resolving regional conflicts. Iranian leaders have reacted to Iran’s inclusion in the order by enacting corresponding restrictions on issuing Americans visas to enter Iran.

However, Iran is materially different from the other countries named in the executive order. The restriction is primarily intended to prevent terrorists linked to the so-called Islamic State and al-Qaeda from entering the U.S. Iran has identified both groups as threats to Iranian national security and has provided military support to the governments of Iraq and Syria to battle them and related Sunni jihadist organizations. Though it did allow some aides to Usama bin Ladin to take refuge in Iran after the September 11 attacks—possibly as leverage against Saudi Arabia, its main regional adversary—Iran kept them under virtual house arrest and eventually expelled nearly all of them.       

Among the countries listed in the ban, Iran and Iraq stand alone as having majority Shi’a populations. Iraq also identifies the Islamic State and al-Qaeda as key threats. However, the Islamic State has had a significant presence on Iraqi territory for years, and will likely retain at least some presence there even after the group is expelled from Mosul. By contrast, Iran has a strong national government and full control over its territory, and no significant numbers of al-Qaeda or Islamic State adherents are present in the country. Despite the degree of Iranian government control, the U.S and Iran have not had diplomatic relations for nearly 40 years. As such, the Trump administration has asserted that it is unable to thoroughly vet Iranian nationals who seek entry into the U.S.  

Iranian leaders are concerned that Iran’s inclusion in the order signals a Trump administration intent on withdrawing from the multilateral nuclear deal—or at least on pressuring Iran more broadly. Additional fuel for such concerns came on February 1, when the Trump administration put Iran ‘on notice’ about its latest ballistic missile test and the arming of Yemen’s Houthi rebels, who have fired on U.S. and allied ships. Neither the Trump administration nor Iran has threatened to abrogate the nuclear deal to this point. However, Iranian leaders fear that the executive order and the growing tensions with the new U.S. administration will hinder Iran’s economic recovery from years of international sanctions. Recent U.S. moves and statements add to the hesitation of European and other foreign companies to reenter the Iranian market, as major companies perceive that the Trump administration may re-impose sanctions on Iran’s key economic sectors. Any new U.S. sanctions would devalue investments these companies might make in Iran.

Iran’s President Hassan Rouhani is also wary of the political ramifications of the moves by the Trump administration. Rouhani—who is running for reelection in May 2017—has already faced substantial criticism from hardliners for failing to produce more dramatic economic results from the sanctions relief stemming from the nuclear deal. Iran’s economy grew about 4 percent in the first full year of sanctions relief, but many Iranians have not yet felt the effects. In January, Rouhani lost his powerful patron, regime stalwart Ayatollah Ali Akbar Hashemi-Rafsanjani, who died of a heart attack. Although Rouhani is still expected to win reelection, tensions with the United States have put that outcome in greater doubt.

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