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Trump Hints at Sanctions on China? Sino-Iranian Nuclear Cooperation to Come Under U.S. Pressure Following JCPOA Withdrawal

May 10th - 2018

Following U.S President Donald Trump’s announcement of his country’s withdrawal from the JCOPA Iran nuclear deal, an agreement reached in 2015 under which sanctions imposed on Tehran by the United Nations and by Western states would be lifted in return for international checks on the country’s nuclear activities to ensure it did not develop weapons of mass destruction, the consequences of the withdrawal have been widely speculated. The Iranian government has warned that it remains ready to resume uranium enrichment should the deal be abandoned, with the country’s Foreign Minister warning warning that Tehran’s "fierce reaction to the violation of the nuclear deal with the major powers will not be pleasant for the U.S.”

While the implications for the Middle East of the U.S. withdrawal are likely to be manifold, President Trump’s speech indicated that the consequences could well be felt beyond the region and extend to Central Asia and the Asia-Pacific - potentially even further. When announcing his country’s withdrawal on May 8th the U.S. President stated: “I will sign a presidential memorandum to begin reinstating U.S. nuclear sanctions on the Iranian regime. We will be instituting at the highest level of economic sanction, any country that helps Iran in its quest for nuclear weapons could also be strongly sanctioned by the United States. We will be instituting at the highest level of economic sanction, any country that helps Iran in its quest for nuclear weapons could also be strongly sanctioned by the United States.” Based on the precedent set by U.S. sanctions on North Korea, the “highest level of economic sanction” is likely to include secondary sanctions on states doing business with Iranian entities or cooperating with the country in peaceful nuclear development. With Iran having shown no signs of either violating or abandoning the nuclear deal, and having pledged continued adherence to the JCPOA, the U.S. definition of aiding Iran in its nuclear program is likely to apply to any state which cooperates with Tehran in the nuclear field - including developing peaceful nuclear energy.

One state which is highly likely to come under U.S. pressure to end nuclear cooperation with Iran is China, which since the signing of the JCPOA in 2015 has taken extensive steps towards expanding cooperation in the development of nuclear energy - as well as expanding military cooperation. Long before the signing of the JCPOA, Beijing had aided Tehran's nuclear program by providing technical expertise, helping Iranian specialists with uranium exploration and mining, and training the country's nuclear engineers. This cooperation appears to have resumed and expanded following the signing of the nuclear agreement. In 2016 it was announced that Beijing would aid Tehran in constructing two entirely new nuclear power plants, while two others would be produced with Russian assistance. Chinese firms have since signed contracts in mid 2017 to redesign existing Iranian nuclear plants, including the Arak heavy water reactor in central Iran. More recently in April 2018 it emerged that China was in talks to build miniaturised nuclear reactors for Iran, which could be a particular point if contention between Washington and Beijing considering their potential to be used to power warshipships and submarines. Iranian MP Mojtaba Zonnou, chairman of the parliament’s Nuclear Committee, stated in regards to the development: "Some negotiations have been held on mutual cooperation and building small nuclear power plants in Iran by China. The Chinese welcomed the proposal and it was decided that the issue be pursued at other (higher) levels.” While this would not directly contravene the JCPOA, it would almost certainly be interpreted by Washington as a sanctionable action with potentially serious consequences for Chinese firms.

U.S. sanctions are set to have more complicated implications for China than for Tehran's other emerging nuclear partners. While the head of Iran’s atomic energy organisation Ali Akbar Salehi noted that that South Korea and Japan had also shown much interest in beginning cooperation with Iran in the nuclear field, prospects for such cooperation by the two closely U.S. aligned states are likely to be quashed entirely by threats of secondary sanctions. Russia meanwhile, already heavily sanctioned by the Western bloc, is unlikely to undermine its valuable partnership with Tehran as a result.  China's calculus regarding its response to threats of secondary sanctions remains the most complicated and the results are difficult to predict.

Threats of sanctions could well leave Beijing in a trying position, forced to choose between either undermining its valuable and much needed economic relationship with the United States or acquiescing to the demands of an increasingly hostile U.S. which unilaterally, and according to many analysts illegally, withdrew from the JCPOA - thereby risking hindering relations with Iran and undermining other potential partners’ confidence in Beijing’s promises. While U.S. sanctions on countries carrying out peaceful nuclear cooperation with Iran have no legal basis internationally, China cannot afford to ignore them entirely due to the importance of its economic ties to Washington. A continued partnership with Iran is particularly critical for Beijing however as the country has been by far the most receptive in the Middle East, possibly in the world, to China's One Belt Road economic initiative in which it occupies a central position as a hub for trade across the Asian continent. Ultimately the result of renewed U.S. sanctions remain to be seen, but given their planned severity they are likely to hold serious implications for China and for Sino-Iranian relations. 

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