U.S. President Donald Trump speaks during a national security strategy speech at the Ronald Reagan Building in Washington, D.C., U.S., on Monday, Dec. 18, 2017. The national security strategy, a document mandated by Congress, will describe the Trump administration's approach to a range of global challenges including North Korea's nuclear program, international terrorism, Russian aggression and China's rising influence. Photographer: Jim Lo Scalzo/Pool via Bloomberg Image Credit: Bloomberg

Although the White House does not want to admit it, President Donald Trump may have been stunned by the failure of Congress to take advantage of the opportunity to reimpose sanctions on Iran. The current climate in Congress is heavily hostile toward the Iranian government.

Two months ago, Trump decertified Iran’s compliance with the terms of the nuclear agreement between that country and the world’s six powers (the US, Britain, France, Germany, Russia, and China), thus activating one of the provisions of the 2015 Iran Nuclear Agreement Review Act (INARA). Congress, according to the Act, had 60 days to introduce legislation to reimpose nuclear-related sanctions on Iran. Those include the severe measures against the country’s banking system and oil exports. December 12 was the deadline for Congress, a deadline that came and went. To many observers’ surprise, Congress did not take any action. The lawmakers did not even circulate a draft bill to that effect.

Trump has expressed intense disdain for the deal, calling it “the worst and most one-sided transactions the United States ever entered into.” By decertifying Iran’s compliance, Trump hoped that Congress would snap the sanctions back and, as a result, the Iran nuclear deal would fall apart, as many analysts also predicted. In the worst case scenario, he hoped that by reimposing the sanctions he could force the other five powers and Iran to return to negotiation table and “address the deal’s many flaws.” For instance, committing Iran to restrict its missile programme, halting its support of armed groups such as Hezbollah of Lebanon, and extending indefinitely the sunset clauses that currently restrict Iran’s nuclear activities for 10 to 15 years.

That strategy allowed Trump to avoid taking the blame for the unpredictable, risky consequences of the deal’s collapse. Meanwhile, he could claim to his political base that he had fulfilled his promise to lay the groundwork for torpedoing the deal even by going against the International Atomic Energy Agency’s (IAEA) assessment of Iran’s compliance with the deal.

In order to encourage Congress to take action, Trump warned in his October speech that “in the event we are not able to reach a solution working with Congress and our allies, then the agreement … can be cancelled by me, as president. … I can do that instantaneously.” But Trump is now caught between a rock and a hard place. He is damned if he pulls out of the deal. Many observers, including the German Foreign Minister, contend that the decision could lead to a wider conflict in the Middle East. And he is damned if he does not, despite the hard stance he has taken since his 2016 campaign.

January 15 is when the Trump administration faces two major deadlines on the nuclear deal. First, Trump must decide whether to extend the waivers to keep the old sanctions suspended. Refraining to do so would violate the nuclear accord. By the same date, Trump must also decide whether to certify or decertify Iran’s compliance with the deal.

Two scenarios may occur, though it must be noted that Trump’s failure to recertify Iran’s compliance is a fait accompli.

First, he may decertify the nuclear deal but extend the Iran sanctions waivers, which were first issued by former president Barack Obama and which have already been extended twice by Trump himself. Republicans argue that such a move will open another 60-day window to reimpose sanctions with a simple majority in the Senate. Many Democrats disagree, however. They argue that the 60-day window for reimposing sanctions with a 51-senator majority is a one-off. Given this conflict, the Congressional parliamentarian may determine which party’s interpretation of INARA is correct. Currently, the Congressional Parliamentarian of the Senate is Elizabeth MacDonough, and the Congressional Parliamentarian of the House is Thomas J. Wickham, Jr.

The second scenario is that Trump will refrain both from certifying Iran’s compliance and issuing new waivers. In other words, the era when Washington and Tehran were in an escalated conflict over Iran’s nuclear programme between 2003 and 2013 would return. This scenario could for Trump be ideal, but it is a longshot for a number of reasons.

First, while the IAEA has repeatedly approved Iran’s adherence to the nuclear deal — most recently on November 13 — it would be a violation of an international agreement if Trump withholds certification of Tehran’s compliance. According to the nuclear deal, the body tasked with verification and monitoring is the IAEA.

Second, as mentioned before, the problem is that Trump would be held responsible for the unpredictable and likely dangerous consequences.

Third, the European Union is unlikely to sit as an idle spectator, if the US sanctions that essentially penalise third parties who work with Iran, return.

The reimposition of sanctions would not simply represent a symbolic and theatrical move. Rather, it would penalise the corporations and organisations that would break the sanctions, because such penalties would be necessary to effectuate the sanctions. Prior to the conclusion of the Iran nuclear deal, numerous banks and companies were penalised with billions of dollars in fines by the US government because they violated sanctions against Iran.

In fact, this precise concern led Federica Mogherini, the EU foreign policy chief, to react after Trump’s October speech by saying that the US president has many powers, but that no single country has the authority to nullify the deal. “The international community, and the EU with it, has clearly indicated that the deal is — and will continue to be — in place.”

Iran’s economic relations with Europe have significantly expanded since the nuclear deal and the ensuing lifting of sanctions in early 2016. The size and the potential of the Iranian market cannot be ignored by the Europeans. Iran’s trade with the European Union topped €9.9 billion in the first half of 2017, double last year’s trade in the corresponding period. Moreover, large European companies have since secured major projects in Iran, including the French automaker Renault, the French energy giant Total, the Swiss MECI Group, Peugeot Citroen’s joint venture, Airbus, the French construction firm Alstom, and the German Siemens AG.

If Trump refrains from issuing sanctions waivers against this backdrop, the US may in effect enter into both an economic and political war with the EU. In any event, Trump has until January 15 to find a way to overcome this major dilemma.

Shahir ShahidSaless is a political analyst and freelance journalist writing primarily about Iranian domestic and foreign affairs. He is also the co-author of Iran and the United States: An Insider’s View on the Failed Past and the Road to Peace.