The Trump administration’s “maximum pressure” campaign now appears to have Iraq in its sights, aiming to increase the economic pain experienced by Iran. European capitals should be alarmed at this new US trajectory – not least given the fragility of the Iraqi government and its efforts to prevent a resurgence of the Islamic State group (ISIS).
Following a flurry of military exchanges between US forces and Iranian-backed groups in Iraq in January, the violence in the country escalated again last week. These groups launched attacks on Camp Taji that killed American and British troops, leading to retaliatory airstrikes by the United States. The episode could prompt the Trump administration to place Iraq under greater economic pressure, in the hope that this will force the country to distance itself from Iran.
It is no surprise that the administration views Iraq as a medium through which it can squeeze the Iranian economy. Iraq and Iran have become increasingly interlinked with each other in recent years; as such, their economies may well rise and fall together. For some time now, Iran has used Iraq to try to ease the economic pressure it is under due to US sanctions. According to one senior European official (who spoke on condition of anonymity), these measures have turned Iraq into Iran’s “economic lungs”. Since 2018, Iraq has become a top export destination for Iranian goods. Indeed, trade between the countries is now worth $12 billion annually. The two sides want to increase this to $20 billion per year from 2021.
Despite moves to diversify its suppliers, Iraq remains dependent on imports of Iranian gas and electricity to meet peak electricity demand in summer. Moreover, around three million Iraqis travel to Iran every year for tourism, medical treatment, trade, and other purposes, spending hard currency such as US dollars – which Iran values highly in its current circumstances.
Iraq now finds itself caught between Iran and the US, despite its stated willingness to strike a careful balance between these key external partners. Washington not only looks unfavourably upon Iraqi economic engagement with Iran but it is also increasingly concerned that the political winds in Iraq are shifting against it. Since the US assassination of Abu Mahdi al-Muhandis (the former leader of Iraq’s Popular Mobilisation Forces) and Iranian General Qassem Soleimani in January, there has been an intensifying debate in Iraq over the presence of the US military. The Iraqi parliament responded to the killings by passing a resolution that called for the departure of all foreign troops – primarily in reference to US forces – and pro-Iran political parties seem intent on seeing this through by the end of the year. The outbreak of violence this month will further inflame the debate.
Washington wants to prevent this outcome. The US administration has signalled that it is willing to use economic measures to coerce Iraq into taking up a more favourable stance on American forces. This is a step that some hawkish elements within the administration – primarily those in the White House – have wanted to take for a long time, with the aim of forcing Iraq to reduce its reliance on Iran. President Donald Trump has warned Iraq that, if the country expels American troops, the US “will charge them sanctions like they’ve never seen before … It’ll make Iranian sanctions look tame”. Reportedly, the US has already drafted new sanctions intended to dissuade the Iraqi government from ordering the withdrawal of American troops.
A key pressure point on Iraq is US waivers on secondary sanctions, which allow Baghdad to import much-needed gas and electricity from Iran. The US has floated the idea of allowing the waivers to lapse, which would subject Iraq to US penalties for importing Iranian energy. For now, the US and Iraq have agreed to a middle ground in which the duration of the waivers falls from 120 days to 45 days. But the issue looms over the Iraqi state, given its dependence on Iranian energy and the manner in which supply disruptions could hit the population.
Iraq is also vulnerable to US pressure because its foreign exchange reserves are located in New York. The US administration has openly warned that it could restrict or even block Iraq’s access to these revenues. Indeed, there is some speculation that the US may already have sought to do so by delaying the flow of funds to Iraq in January, when Iraqi politicians were debating the future of foreign troops in the country. At a time of falling oil prices, which will significantly hit Iraqi revenues, a lack of access to foreign exchange reserves could be devastating.
Iraq is, of course, no stranger to US sanctions. Following the 1990-1991 Gulf War, the US imposed UN-mandated sanctions on Iraq that crippled the country’s economy. These measures had a dramatic impact on Iraq’s infrastructure and forced many Iraqis into a struggle for survival. There were widespread shortages of food, and severe restrictions on access to medicines and healthcare. But this pressure did not weaken Saddam Hussein or loosen his grip on the country; it took an invasion to remove him from power. For Iraqis, the spectre of sanctions heralds a return to those days.
One decisive factor in the development of US-Iraq relations will be the makeup of the new Iraqi government, particularly the next prime minister’s attitude towards ties with the US. The current nominee is Adnan al-Zurfi, an Iraqi-American politician who worked closely with the Coalition Provisional Authority in post-2003 Iraq. He is attempting to form a government by mid-April. And it is widely believed that, if he succeeds in becoming prime minister, he will attempt to rebuild relations with Washington. If the US intensifies its economic pressure on Iraq now, this will not only amount to collective punishment but also risk empowering hawkish Iraqi leaders who work against US objectives.
European governments also have significant interests in Iraq, particularly in countering terrorism, stabilising the country, and improving living conditions in ways that reduce refugee flows to Europe. As such, they should urgently increase their efforts to dissuade the US from applying further economic pressure on Iraq – by reaching out to not just the White House but also the US Treasury, Congress, and the Pentagon. European capitals that are involved in the anti-ISIS coalition should emphasise the interest they share with Washington and Baghdad in preventing the resurgence of the group.
If the US intensifies its economic pressure on Iraq, this will deprive state institutions of the resources they need to provide security and basic services to an increasingly frustrated population. The effect would be particularly severe at a time of incredibly low oil prices. It is fair of Washington to encourage Baghdad to assert its sovereignty and weaken its reliance on external actors such as Tehran, especially in the wake of protests across Iraq. Europeans should look to support this process by further assisting Iraq’s push for economic diversification. But Europeans should also warn the Trump administration that the more it tries to coerce Baghdad into acting as it wishes, the more likely it is feed instability that pushes Iraq closer to Iran.
This article has been republished with permission from the European Council on Foreign Relations.
Ellie Geranmayeh is a senior policy fellow and deputy head of the Middle East and North Africa programme at the European Council on Foreign Relations. She specializes in European foreign policy in relation to Iran, particularly on the nuclear and regional dossiers and sanctions policy.
SOUTH CHINA SEA (Feb. 9, 2021) The Theodore Roosevelt and Nimitz Carrier Strike Groups steam in formation on scheduled deployments to the 7th Fleet area of operations. (U.S. Navy photo by Mass Communication Specialist 3rd Class Elliot Schaudt/Released)
The U.S. will have almost half of its aircraft carriers deployed in the Pacific in the coming weeks.
The South China Morning Post reported on February 14 that five of America’s 11 aircraft carriers would all likely soon be deployed there at the same time. Two of the carriers, the USS Carl Vinson and USS Theodore Roosevelt have been participating in a military exercise with Japan in the Philippine Sea, the USS Ronald Reagan is in port at Yokosuka, the USS Abraham Lincoln departed San Diego earlier this month, and the USS George Washington is expected to relieve the Reagan in a few weeks.
This is an unusual concentration of America’s naval power in one region at once, and it is being widely interpreted as a show of force meant for China and North Korea.
The Biden administration has made a point of making more shows of force in East Asia over the last year to reassure Asian allies that the U.S. has not forgotten about them. That isn’t surprising given the importance that the administration attaches to the “Indo-Pacific” and an active U.S. role in it, but in doing this it may also be contributing to increasing tensions with both Beijing and Pyongyang. We have already seen some of this in the back-and-forth between the U.S. and North Korea since last summer as North Korea has answered U.S. naval deployments to South Korea with additional missile tests and more bellicose rhetoric.
While these carrier deployments are presumably intended to signal American resolve and commitment to its regional allies, they could easily encourage China and North Korea to engage in their own reciprocal demonstrations of strength. They are also a reminder that the U.S. approach to East Asia is still very much a “military-first” approach that gives short shrift and devotes relatively few resources to economic statecraft and diplomacy. International relations scholar Van Jackson warned about the dangers of this approach more than two years ago, and since then the U.S. has only ramped up its military spending and deployments.
Because Washington’s attention has been focused so intently for the last four months on the war in Gaza and the other conflicts in the Middle East connected to it, it seems that the administration wants to show that it isn’t neglecting East Asia. The carrier deployments in the Pacific appear to be an attempt to “make up” for the continued massive over-investment of energy and resources in the Middle East.
The show of force may satisfy some allied governments, but it could also confirm the impression in both friendly and hostile capitals that the U.S. is overstretched and trying to take on too many tasks at the same time. The habit of reassuring allies so frequently has its own costs, including encouraging greater allied dependence, and when it is done too often it can have destabilizing effects on the wider region.
One of the principle weaknesses of U.S. foreign policy in East Asia is an overreliance on military deterrence. This tends to ratchet up tensions more than necessary and undermines credible assurances to adversaries. The U.S. excels at reassuring allies with its displays of military power, but because it often fails to strike a balance by giving adversaries assurances about its intentions, our government can feed the fears of Chinese and North Korean leaders and encourage them to assume the worst about what the U.S. is doing.
The carrier deployments suggest that the administration doesn’t understand the need for balancing deterrence and assurance. Failing to balance the two risks making conflict based on a miscalculation more likely. As the Quincy Institute’s Michael Swaine recently wrote about U.S. deterrence and Taiwan, “This balance is essential because, if the level of punishment or denial capability acquired is in fact seen as threatening the adversary’s most vital interests, the adversary, rather than being deterred from taking aggressive action, will become more inclined to undertake or threaten preemptive or punishing moves of its own in order to protect those interests, thus increasing, rather than decreasing, the chance of conflict.”
By relying so much on shows of force designed to intimidate China, the Biden administration increases the risk of a crisis.
The potential danger with North Korea is arguably even greater, since the North Korean government has a long history of responding to U.S. and allied pressure with its own provocations and threats. To the extent that Pyongyang perceives the deployment of so many carriers to the Pacific as directed even partly at North Korea, Kim Jong-un may conclude that he needs to show off his country’s own capabilities with additional missile tests and possibly even a new nuclear test.
Last year, North Korea reacted very angrily to the arrival of the USS Ronald Reagan in Busan, so it seems reasonable to expect an even harsher response if there are multiple carriers in the vicinity. Given the increasingly hostile rhetoric already coming from Pyongyang in the last few months, it would not take much for a new standoff between the U.S. and North Korea to begin.
The U.S. can ill afford a new crisis in East Asia on top of the other conflicts that it is involved in, but its overly militarized approach to the region is not the way to avoid it. If Washington wants to make conflicts in East Asia less likely, it will need to do a much better job of understanding its adversaries’ thinking and of offering them assurances that they can believe. Right now, the U.S. is doing far too little of both, and that is making the U.S. and its allies less secure than they could be.
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Left-to-right: Senator-elect Ted Budd (R-N.C.); Senator Mitch McConnell (R-KY), the Senate Minority Leader; Senator-elect Katie Britt (R-AL); and Senator-elect J.D. Vance (R-OH) pose for a photo before meeting in Leader McConnell’s office, at the U.S. Capitol, in Washington, D.C., on Tuesday, November 15, 2022. (Graeme Sloan/Sipa USA)
The so-called GOP “civil war” over the role the United States should play in the world made headlines earlier this week when the Senate finally passed a national security supplemental that provides $60 billion in aid for Ukraine and $14 billion for Israel.
The legislation, which was supported by President Joe Biden and the overwhelming majority of the Senate’s Democratic caucus, proved more controversial among Republicans. Twenty-two GOP Senators voted in favor of the legislation, while 27 opposed it.
An analysis of the votes shows an interesting generational divide within the Republican caucus.
Each of the five oldest Republicans in the Senate — and nine of the ten oldest — voted in favor of the supplemental spending package. Conversely, the six youngest senators, and 12 of the 14 youngest, opposed it.
Equally striking was the breakdown of votes among Republicans based on when they assumed their current office. Of the 49 sitting GOP Senators, 30 were elected before Donald Trump first became the party’s presidential candidate in 2016. Eighteen of those 30 supported the aid legislation. Of the members who came to office in 2017 or later, only four voted to advance the bill, while 15 voted against.
The difference in votes among those elected since 2016 is likely partly attributable to Trump’s unconventional approach to foreign policy. The Republican party establishment during the Cold War and Global War on Terror is often associated with hawkishness, including towards Russia. While the party has always carried some skepticism toward foreign aid, some of the most significant spending increases have taken place during the presidencies of Republicans Ronald Reagan and George W. Bush.
Trump, however, won in 2016 in part for his open disdain for mission creep after the GWOT, what he called the failed war in Iraq, and foreign aid he believed made countries dependents rather than reciprocal partners and allies.
“[Trump] certainly created the cognitive space,” Brandan Buck, a U.S. Army veteran and historian of GOP foreign policy, tells RS. “He's more of an intuitive thinker than a person of principle, but I think him being on the scene, prying open the Overton window has allowed for a greater array of dissenting voices.”
Others have argued that the trends are perhaps also indicative of the loyalty that Republicans who assumed their offices during the Trump presidency feel toward him. Trump spoke out forcefully against the legislation in advance of the vote.
“WE SHOULD NEVER GIVE MONEY ANYMORE WITHOUT THE HOPE OF A PAYBACK, OR WITHOUT “STRINGS” ATTACHED. THE UNITED STATES OF AMERICA SHOULD BE “STUPID” NO LONGER!,” the former president wrote on the social media platform Truth Social the weekend before the vote.
The vote cannot only be explained by ideology, as some typically hawkish allies of Trump, like Sen. Lindsey Graham (R-S.C.) ultimately voted against the package. Graham is a staunch supporter of Israel, has voted for previous Ukraine aid packages, and in the past called aid for Ukraine “a good investment” and “the best money we’ve ever spent.” By the time the vote on the most recent spending package came around, Graham was lamenting the lack of border security provisions and echoing Trump’s argument that aid to Ukraine should be a “loan.”
Meanwhile, Senators took note of the generational gap, and the debate spilled over into the public. .
“Nearly every Republican Senator under the age of 55 voted NO on this America Last bill,” wrote Sen. Eric Schmitt (R-Mo.), 48, on the social media platform X. “Things are changing just not fast enough.” Schmitt was elected in 2022.
“Youthful naivety is bliss, the wisdom of age may save the west,” retorted Sen. Kevin Cramer (R-N.D.) “Reagan may be dead, but his doctrine saved the world during less dangerous times than these. If the modern Marx (Putin for the youngsters) restores the USSR while we pretend it’s not our problem, God help us.” Cramer, 63, was sworn in in 2019, making him one of the handful of recently elected senators to support the aid legislation.
“I like Kevin, but come on, man, have some self-awareness,” Sen. J.D. Vance fired back. “This moment calls out for many things, but boomer neoconservatism is not among them.”
Vance, who at 39 is the youngest Republican member of the Senate, noted in his post that “the fruits of this generation in American leadership is: quagmire in Afghanistan, war in Iraq under false pretenses.” He said younger Americans were disillusioned with that track record.
Buck, who served several tours in the Afghanistan war, and whose research includes generational trends in U.S. foreign policy thinking, pointed out that there is strong historical precedent for believing that age and generation affect how members of Congress view America’s role in the world.
“It's certainly not unusual for there to be generational trends in foreign policy thinking, especially within the Republican Party,” Buck told RS. Following the end of World War II, he said, it took “a full churning” of the conservative movement to replace old-school non-interventionist Republicans and to get the party in line with the Cold War consensus. “I think what we're seeing now is something similar but in reverse with a generation of conservatives.”
He added that the failures of the War on Terror resulted in a deep skepticism of the national security state and the Republican party establishment. Opinion polling and trends show that the American public that grew up either during or in the shadow of the disastrous military campaigns in the Greater Middle East is generally opposed to military intervention and more questioning of American institutions.
“All the energy on FP [foreign policy] in the GOP right now is with the younger generation that wants fundamental transformation of USFP [U.S. foreign policy],” noted Justin Logan, director of defense and foreign policy studies at the Cato Institute, on X. “The self-satisfied, insular neocons who loathe their voters’ FP views are a dying breed.”
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Egyptian President Anwar Sadat shakes hands with U.S. President Jimmy Carter and Israeli Prime Minister Menachem Begin in September 1978. (Public Domain photo courtesy of Carter Library)
Since October, Egypt has joined most of the international community in calling for a ceasefire in Gaza. With Egypt being the only Arab country to border Gaza, Cairo’s stakes are high. The longer Israel’s war on the besieged enclave continues, the threats to Egypt’s economy, national security, and political stability will become more serious.
Located along the Gaza-Egypt border is Rafah, a 25-square-mile city that until recently was home to 300,000 Palestinians. Now approximately 1.4 million Palestinians are sheltering in Rafah because of the Israeli military’s wanton destruction of Gaza City, Khan Younis, and other parts of the Strip. Having asserted that four Hamas battalions are now in Rafah, Israel’s Prime Minister Benjamin Netanyahu has declared that deploying Israeli forces to this Palestinian city is necessary for his country to defeat Hamas amid this war. As of writing, Israel’s military is preparing to launch a campaign for Rafah.
Officials in Cairo fear that Israeli military operations in Rafah could result in a large number of Palestinians entering the Sinai. “An Israeli offensive on Rafah would lead to an unspeakable humanitarian catastrophe and grave tensions with Egypt,” said European Union foreign policy chief Josep Borrell on February 10.
Not only could such a scenario fuel massive amounts of friction between Cairo and Tel Aviv, but it could also severely heighten tensions between the Egyptian public and President Abdel Fatah el-Sisi’s government. It’s easy to imagine a mass expulsion of Palestinians from Gaza into Egypt’s Sinai Peninsula, which would amount to essentially a “Nakba 2.0,” triggering widespread unrest in Egypt if the government in Cairo is widely seen by Egyptians as playing a role in permitting, if not facilitating, such an ethnic cleansing of Palestinians from Gaza. Along with economic considerations, this is one of the main reasons why Cairo has articulated that Israel depopulating Gaza of Palestinians and forcing them into Egypt is a red line that Tel Aviv must not cross.
“The biggest concern for Cairo is related to the fate of the [Palestinians in Gaza] forcibly evacuated by the Israelis and who might find a ‘safe haven’ in Sinai. An uncontrolled influx of Palestinians into the [Sinai] Peninsula would be an enormous burden on Egypt, which would have to manage a problematic situation from a political and security point of view, as well as having to justify internally to its own public opinion an imposition that came from outside,” Giuseppe Dentice, head of the Middle East and North Africa Desk at the Italian Center for International Studies, told RS.
“It is no coincidence that Cairo has reinforced the border with Gaza, closed the Rafah crossing, and warned Israel that any unilateral action involving a forced exodus of the Strip’s inhabitants to Egyptian territory could jeopardize not only bilateral relations, but the preconditions for peace and stability guaranteed in the [Camp David Accords],” added Dentice.
On February 15, Maxar Technologies, a Colorado-headquartered space technology company, captured satellite images showing Egypt’s construction of a wall roughly two miles west of the Egypt-Gaza border. The following day, the London-based Sinai Foundation for Human Rights said that this construction “is intended to create a high-security gated and isolated area near the borders with the Gaza Strip, in preparation for the reception of Palestinian refugees in the case of [a] mass exodus.”
What might happen to the Camp David Accords?
On February 11, two Egyptian officials and one Western diplomat told the Associated Press that Cairo might suspend the 1979 Camp David Accords if Israeli troops wage an incursion into Rafah. A day later, Egyptian Foreign Minister Sameh Shoukry denied such reports about his government’s plans to freeze the peace treaty with Israel, yet he emphasized that Egypt’s continued adherence to the 1979 deal would depend on Tel Aviv reciprocating.
Alarming to Egyptian officials were Netanyahu’s statements late last year about the Israeli military taking control of the Philadelphi Corridor (a nine-mile-long demilitarized buffer zone between Gaza and Egypt which was established in accordance with Egypt and Israel’s peace treaty) because such a move on Israel’s part would be a breach of the Camp David Accords.
Are Egyptian officials serious about possibly freezing the historic peace deal? Or does such talk amount to empty threats issued for political purposes at home, as well as pursuing certain Egyptian aims vis-à-vis Washington and Tel Aviv? Mouin Rabbani, a political analyst and co-editor of Jadaliyya, told RS that if these statements from anonymous Egyptian officials are geared toward a domestic audience but Cairo doesn’t follow through, Sisi’s government could have a “potentially serious problem on its hands.”
Ahmed Aboudouh, an associate fellow with the Chatham House and a nonresident fellow with the Atlantic Council, doubts that Egypt would go as far as suspending the Camp David Accords. “In the end, Egypt is unlikely to take the first step to tear the treaty up unilaterally,” he said.
But what Egypt is doing is embracing “discursive strategic posturing” whereby Cairo uses “rhetorical escalation” and directs messages at three audiences, Aboudouh told RS. First is the domestic audience to say that Cairo is standing up for Egypt’s core security interests as well as the Palestinian cause. The second is Washington to relay the Egyptian government’s anger at the Biden administration for not stopping Israeli actions that threaten to displace Palestinians into the Sinai. Third is to Netanyahu, generals in the Israeli Defense Forces, and the Israeli intelligence community.
Gordon Gray, a former U.S. Ambassador to Tunisia, also discounts recent suggestions that Cairo would suspend its peace treaty with Israel for three main reasons. “First, Egypt does not seek military confrontation — even an inadvertent one — with Israel. Second, Egypt does not want to risk losing U.S. military assistance ($1.3 billion annually), which was granted as a direct result of the Camp David Accords. Finally, while Egypt abhors the Israeli military campaign in Gaza, it shares Israel’s views about the threat Hamas poses,” said Gray in an interview with RS.
What would come from Egypt freezing the treaty?
Despite many experts believing that Egypt would not freeze the Camp David Accords, that potential scenario should be considered. There are important questions to raise about what it could lead to in terms of region-wide ramifications, as well as Cairo’s relationships with Western capitals. But it’s difficult to predict how events would unfold if Egypt took that step because there would be so many unknown variables in play.
Egypt could act in different ways after suspending the peace treaty with Israel. Rabbani asked, “Would it simply declare the peace treaty suspended and leave it at that or would it stop implementing provisions of that treaty?”
Regardless, any freezing of the Camp David Accords by Egypt would inevitably bring a layer of instability to Egyptian-Israeli relations never seen since Jimmy Carter’s administration, which — with help from Iran, Morocco, and Romania — brought Egypt’s then-President Anwar Sadat and Israel’s then-Prime Minister Menachim Begin together in northern Maryland’s Catoctin Mountains to sign the peace treaty in September 1978. The response from Washington would likely be extreme, particularly given how central Egyptian-Israeli peace has been to U.S. foreign policy agendas in the Middle East for almost half a century while surviving a host of regional crises, including Israel’s invasion of Lebanon in 1982 and all the previous Gaza wars.
“The U.S. is certain to act true to form and retaliate against Egypt without holding Israel in any way accountable for producing this crisis, and Washington may well cease foreign assistance to Egypt, which is a direct function of its peace treaty with Israel. The EU will probably announce it is launching an investigation of the Egyptian school curriculum or some other nonsensical initiative,” Rabbani told RS.
Irrespective of how Egypt approaches its relationship with Israel, the fact that officials in Cairo are suggesting a potential freeze of the Camp David Accords speaks volumes about the Gaza war’s impact on Israel’s diplomatic standing in the Arab world.
With the probability of more Arab countries joining the Abraham Accords in the foreseeable future having essentially dropped to zero, the pressing question is not which Arab government might be next to normalize with Tel Aviv. The focus has shifted to questions about how Arab countries already in the normalization camp, such as Egypt, will manage their formalized relationships with Israel at a time in which Israeli behavior in Gaza is widely seen across the Arab-Islamic world as genocidal.