Thinking the unthinkable: Improved US-Iran relations under Trump?

It is no surprise that both Iran and the United States have approached their first diplomatic engagement in four years with wariness and skepticism. While not an insuperable hurdle, it is hard to overcome more than 40 years of mutual enmity. Both parties have set the stage with characteristic bellicosity. Prior to the start of talks in Muscat, Oman, Iranian President Masoud Pezeshkian said, “We are not seeking war, but we will stand strong against any aggression.” Washington has made equally vitriolic statements, with President Donald Trump saying, “If they don’t make a deal, there will be bombing.” 

There are plenty of reasons to be skeptical about the probability of the negotiations culminating in a deal. But it also would be a mistake to assume that the conditions in 2025 are the same as those in 2015, when, as the Joint Comprehensive Plan of Action (JCPOA) was being signed, Iran held many more cards than it does today. While it is tempting to conclude that the Iranians are now, as they have done in the past, using the talks to stall for time, this conclusion fails to recognize that today time is not on their side. It also misses the fact that changes afoot in the Middle East and the broader global community give Iran an incentive to move toward an agreement, assuming that Washington is sincere and realistic in its negotiations with Tehran.

Changing regional and global conditions

So what has changed in the past decade that could alter the Iranian bargaining calculus in the current round of negotiations? The region itself has been transformed. Due to the chain of events that occurred after the Hamas attacks on Israel on Oct. 7, 2023, Iran can no longer rely on its portfolio of regional militias and alliances to deter the United States and Israel should the talks falter. The degradation of Hamas and Hezbollah and the loss of Syria as an ally, all key elements of Iran’s much vaunted “Axis of Resistance,” mean that Iran’s sense of a security shield has been compromised. And in fact, these allied militias have created liabilities for Iran, given that Washington and Jerusalem hold Iran accountable for their actions.

Because of this vulnerability, Tehran calculates that should talks fail, there is a significant risk that Israel, with American backing, could launch strikes on Iranian military and nuclear assets. Given that the red line of direct military actions by Jerusalem and Tehran against one another was crossed in 2024, this is no mere hypothetical risk.  

The prospect of Iranian diplomacy with the United States on the nuclear file should not be seen in isolation, but rather as part of a potential overall Iranian shift toward diplomacy across the board. With the collapse of deterrence Iran appears to want to build on the diplomatic progress it has already made with regional rivals, particularly Saudi Arabia and other Gulf Arab states. In a way, we can see Tehran’s regional diplomacy as indirectly linked to the current talks with Washington. Iran wants Saudi Arabia to act as a counterweight to Israeli pressure on the US for an unrealistically maximalist negotiating position and perhaps even military actions against Iran.

Emerging global conditions could also be supportive of a deal between the US and Iran. The threat of looming snapback UN sanctions specified in the 2015 JCPOA agreement, which is set to expire in October, gives Iran additional incentives to negotiate with the Americans in good faith — and with alacrity. Moreover, the potential for Russia’s rehabilitation by Washington could spook Tehran into believing it has lost some leverage with Moscow, weakening its hand with the United States. It is not out of the realm of possibility for Russia to play a mediating role between the US and Iran, should negotiations bog down, something that Russian President Vladimir Putin would relish.

And China, while sharing Tehran’s view of needing to push back against the United States, values stability in the Middle East. The Iranians are aware of the risk that, if talks with the United States fail and they slouch back into the role of regional spoiler by doubling down on their militias, Beijing might distance itself politically and diplomatically from Iran.

A steadily worsening situation at home

Domestic considerations in Iran could pull Iranian leadership toward diplomacy as well. A deal that provides for sanctions relief could reduce public anger at a critical moment when Iran is feeling under siege. Despite Supreme Leader Ali Khamenei's earlier rhetorical dismissal of negotiations with the US as “unwise” and “dishonorable,” the reality on the ground suggests a very different picture: he cannot afford to reject diplomacy, hence the unprecedented swift acceptance of starting talks with Washington after Trump sent him a letter in early March. The domestic, economic, and regional costs of ideological rigidity have grown too high — and Khamenei is being cornered into talks whether he likes it or not. 

Iran’s economic situation is catastrophic — the worst since the Iran-Iraq War (1980-88), as experts admit. President Pezeshkian has publicly declared the economy to be on a wartime footing. Sanctions, currency devaluation, inflation, environmental collapse, and financial mismanagement have created a perfect storm. Khamenei’s Nowruz (Persian New Year) speech on March 20, usually ideological, was uncharacteristically materialistic, focused on investment and production. Even enforcement of the hijab requirement is collapsing, an indication that the regime is under pressure and needs to provide some good news to the Iranian public.

Khamenei knows the card he holds with the Iranian people is that he is the key to productive talks with the Americans. Reaching a compromise with the US would placate a vast majority of the population, which for some time has felt that Iran’s Axis of Resistance to the United States has become a strategic liability, draining resources while failing to deliver security or diplomatic leverage.

Divisions within the elite

There are also elites in Iran advocating for a deal that goes beyond the nuclear file. Supporters of a regional reset in Tehran want Iranian policy to prioritize what the national interest dictates and not open-ended ideological pet projects such as supporting militant Islamist groups. As Nasser Hadian, a prominent foreign policy voice in Tehran, put it, negotiations with the US beyond the nuclear file can focus on areas of potential common interests, such as stability in neighboring Iraq: “Iraq is extremely important to us. Instability in Iraq means instability in Iran. These are goals we can agree on with the Americans — as we have in the past.” Indeed, Washington and Tehran have at times coordinated their efforts in Iraq, including during the fight against ISIS.

Hadian argues that Iran’s past approach — resisting containment while engaging in selective dialogue — should shift to embracing comprehensive engagement, with all issues on the table: nuclear, regional, ballistic missiles, and even human rights inside of Iran, going way beyond the topics that were on the table during the JCPOA talks of 2015. He downplays the relevance of Syria, Lebanon, and Yemen to Iranian national interests, arguing that Yemen is mainly a Saudi issue, and Iran can work directly with Riyadh. Syria is too fragmented for a clear Iranian policy now; the best strategy is “strategic patience,” according to Hadian. The real focus, he insists, is Iraq, a view he believes the Americans could potentially share.

There is of course opposition to such a broad approach from hardline elements in Tehran, including the Islamic Revolutionary Guard Corps (IRGC), which has made it clear that Iran’s military capabilities and regional proxy forces are “red lines” in the talks with Washington. In reality though, due to both internal and external pressure, the IRGC has little choice but to recalibrate. Even some IRGC commanders have called for a lowering of tensions in the region after the recent setbacks to the Axis of Resistance.

For now, Khamenei’s main concern on the American question seems to be whether Trump is serious about a compromise with Tehran, and one that will not humiliate Iran and Khamenei entirely.

A pivotal moment

We are at an inflection point with Iran, and the opportunities should be exploited. But unless these positive factors are finessed, there are plenty of regional and global dynamics that could work against a deal. An overly aggressive posture by the US, or even a preemptive military attack by Israel, could spoil any possible conditions for diplomacy. Also, should China-US rivalry descend into an all-out trade war, Beijing could have an added incentive to double down on support for Iran, giving Tehran less of a reason to make painful concessions to Washington. And of course, any unrealistic goals set by the Trump administration during negotiations could push Iran in a more defiant direction. Initial statements from the White House suggested that the goal is to prevent Iran from acquiring a nuclear weapon rather than to follow the Libya option (pushed by the Israelis) to deprive Iran of any enrichment capacity. But by the next day, the White House was taking a more maximalist position. Should that position prevail during the next round of talks, then the likelihood of a deal will go down significantly.  

In sum, there are significant opportunities to take advantage of regional, global, and domestic trends to forge an agreement that could remove a big source of instability from the Middle East, and perhaps even create the possibility of peaceful coexistence between the United States and Iran. There are also opportunities for a more comprehensive agreement than the 2015 JCPOA. But there are equally significant risks of misreading the moment and letting this opportunity slip by, with potentially dire consequences for the region and even the global community. 

 

Ross Harrison is a senior fellow and book series editor at the Middle East Institute. He is the author of the upcoming book Decoding Iran’s Foreign Policy.

Alex Vatanka is a Senior Fellow at MEI and the author of The Battle of the Ayatollahs in Iran: The United States, Foreign Policy and Political Rivalry Since 1979.

Photo by Morteza Nikoubazl/NurPhoto via Getty Images