The Art of the Signal: Trumping Cheap Talk on Iran

Photo Credit: Wikimedia Commons

“A little hyperbole never hurts,” Trump writes in his book, The Art of the Deal. And in his stance towards Iran, Trump is employing just this.

Almost two years have passed since the P5+1 and Iran inked the Joint Comprehensive Plan of Action (JCPOA), which promised an easing of economic sanctions on Iran in exchange for the dismantling of its nuclear weapons program. But only three months into the Trump presidency, the fate of the deal remains uncertain as Trump continues to lambast the accord as “one of the worst deals” ever made.

As the adage goes, talk is cheap. But a nuclear Iran is costly, and the Trump administration knows this. Today, the Islamic Republic is in a precarious position of trying to consolidate the gap between Trump’s tweet storms and the administration’s signaling. “When talk is free,” writes Michael Moynihan, managing editor of Vice, “…people can literally say anything. They may tell the truth—or they may not. To be credible, however, there must be some chance that the signal is true. So people may include some signal in a sea of noise.”

In this sense, Trump’s Iran strategy is clear: use costless rhetoric to keep Iran on its toes, while simultaneously signaling an interest in preserving the deal.

Letter, Spirit, and Intent
The deal’s failure, or any perception that the United States is not adhering to the “letter, intent, and spirit” of the deal, has much bigger implications than a nuclear Iran. The United States could forfeit billions of dollars in export revenue and hundreds of thousands of jobs should it not capitalize on the deal. Impeding U.S. investment in Iran could jeopardize the deal, particularly if Iran does not reap the incentives that led it to abandoning its nuclear program in the first place.

Ahead of Iran’s May 2017 presidential election, failing to signal that the United States intends to uphold the deal will energize Iran’s anti-American hardliners who are eager to blame both Iran’s moderates and the U.S. for the deal’s failure. Ultimately, the greatest danger in U.S.-Iran relations today is not the Trump administration’s babbling that is confusing the American stance on the JCPOA, but rather lackluster U.S. compliance.

Iran, to its credit, seems to understand this. Iran’s state-run Press TV has published countless pieces with similar sentiments: that in light of Trump’s unpredictability, Iran should not make quick conclusions about what the U.S. President says, least of all because he is “constantly weaving between the right and the left, back and forth” as a means to “keep his opponents guessing about who he is and what he intends to do.”

Green Lighting the Deal
Luckily, the opportunities for low-cost, low-risk signaling that will reassure Iran are a plenty. U.S. officials are already considering an easing of one of the biggest barriers to the West doing business with Iran: the ban on dollar denominated transactions. While the ban itself is not reversed, the U.S. Treasury has made great pains to clarify the permissibility of using offshore financial clearinghouses to facilitate dollar transactions with Iran.

Under Obama, the Office of Foreign Assets Control (OFAC) signaled a commitment to deal by fast tracking the licenses Boeing needed to sell aircrafts to Iran in a deal worth $18 billion. While there has not been any further OFAC fast tracking under Trump, that the administration has not followed through on threats to “amend, modify, or revoke” Boeing’s licenses sends a loud signal indicating the administration’s high valuation of the deal.

In fact, Trump has managed to capitalize on the Boeing deal. In February, he held a rally at the Boeing factory in South Carolina, touting the importance of domestic manufacturing. “We’re here today to celebrate American engineering and American manufacturing,” Trump said to the Boeing factory workers. “We’re also here today to celebrate jobs… God bless Boeing.” And despite never mentioning how Boeing’s deal with Iran is responsible for supporting 100,000 jobs at the company, the signal in rallying at the South Carolina plant was clear: here were the benefits of upholding the deal.

Combining Cheap Talk and Signals
If the administration can signal U.S.-adherence to the deal by implementing measures not required by the JCPOA, for example by fast tracking OFAC licenses, Iran may tamp down its non-nuclear ambitions. And should Iran forego its non-nuclear aims in favor of reaping the JCPOA’s benefits, it will effectively reveal the Islamic Republic’s valuation of the deal.

Despite fears that Trump’s tweets could lead to war, the truth is that Trump can both talk and signal. The administration’s talk will mitigate potential audience costs, while keeping Iran vigilant in its dealings on the world stage.

Trump’s Iran policy goes against everything traditional theory claims; namely, that confusion around intent can lead to conflict. But if Trump can balance his cheap talk with concrete, positive signals, Iran will be kept decades away from the bomb, incomplete information be damned.