As Donald Trump moves into the White House on January 20, one of the key foreign policy concerns that awaits his immediate attention is Iran. Middle East watchers are keeping their fingers crossed to see whether Trump continues the "maximum pressure" approach of his first term against Tehran or opens a window for diplomatic engagement. Since Trump's first term, marked by the American withdrawal from the 2015 Iran nuclear deal (JCPOA) and the imposition of crippling sanctions, relations between the two nations have been defined by heightened tensions, economic warfare and even indirect military confrontations. The ongoing Gaza war has further worsened the situation. Yet, as the political landscape in both Washington and Tehran shifts, new opportunities for diplomacy, as well as new obstacles, could arise.
Trump’s policy towards Iran during his first term was characterised by a policy of "maximum pressure". In 2018, he unilaterally withdrew from the nuclear deal, signed by his predecessor Barack Obama. The JCPOA was aimed at curbing Iran’s nuclear programme in exchange for sanctions relief. Trump’s decision to pull out of the agreement escalated tensions significantly, triggering more sanctions, particularly targeting Iranian oil exports. These sanctions led to a sharp decline in oil revenues, crippling Iran's economy, leading to inflation and unemployment. Yet, Iran refused to budge from its stated position. Even with near-total sanctions in place, Tehran’s leadership has shown little inclination to abandon its nuclear ambitions. The commitment to the nuclear programme is seen as a key component of its national security.
Retaliating against American pressure, Tehran resumed uranium enrichment at higher levels and reduced cooperation with international inspectors. The friction between the US and Iran reached its peak in January 2020 when Trump authorised the assassination of General Qassem Soleimani, commander of the Quds Force, a division of the Islamic Revolutionary Guard Corps in charge of clandestine military operations. The attack inflamed anti-American sentiment in Iran and worsened an already deep mistrust between the two nations. Iran adopted a policy of "no war, no negotiations" with the Trump administration, signalling a deep unwillingness to engage diplomatically under the harsh conditions imposed by the US.
Any prospect for change in US-Iran relations depends in large part on Iran’s internal political landscape. Iran's leadership is deeply divided between hardliners and reformists. The supreme leader, Ayatollah Ali Khamenei, holds ultimate authority over foreign policy, but the president also plays a significant role, particularly in diplomatic matters.
During the tenure of hardline president Ebrahim Raisi, Iran has pursued a more combative stance toward the West. However, the election of reformist Masoud Pezeshkian in 2024 signals a potential shift. Pezeshkian has expressed a willingness to re-engage with the West and resume nuclear talks, recognising the economic devastation caused by sanctions. However, any policy shift would require Khamenei’s approval, and the hardliners within Iran’s Revolutionary Guards Corps view engagement with the US with suspicion, particularly after the Soleimani assassination. Reports about Khamenei’s health concerns, meanwhile, could aggravate matters.
The internal struggle between reformists, who see diplomacy as a way to alleviate economic pressures, and hardliners, who view engagement with the US as a betrayal, complicates any potential breakthrough. Even within the reformist camp, there is deep scepticism about negotiating with a US president who ordered the killing of one of Iran's most revered figures. Yet, some voices in Tehran, including Vice President Mohammad Javad Zarif, have advocated for a more constructive engagement with Trump.
There is, however, the possibility that Trump 2.0 could continue his "maximum pressure" campaign, perhaps even escalating it. His key cabinet choices—Senator Marco Rubio for secretary of state and Congressman Mike Waltz for National Security Advisor—have been staunchly pro-Israel and prefer maintaining pressure on Iran, hoping that economic isolation will force the country back to the negotiating table.
Trump would also be keen to contain Iran’s growing ties with China, Russia and India. As Tehran seeks to mitigate the impact of US sanctions through economic partnerships with these countries, the Trump administration may look for ways to leverage these relationships in its negotiations.
The president-elect would also want to limit Iran’s regional ambitions, especially as the country is on the back foot following significant setbacks it faced during the ongoing Middle East war. Iran has long supported militant groups such as Hezbollah in Lebanon, Hamas in Gaza, and Shiite militias in Iraq, Syria and Yemen. These groups are seen by Iran as key tools to extend its influence in the Middle East, but they have been a source of major concern for the US and its allies, particularly Israel.
Israel, under Prime Minister Benjamin Netanyahu, has consistently opposed Iran’s nuclear programme and its support for militant groups. For Trump, any future deal with Iran would likely require significant coordination with Israel, as the country views Iran’s nuclear ambition as an existential threat. Israel’s support for any US-Iran detente would be critical, and without addressing Iran’s regional actions, it would be difficult for Trump to secure political backing for any deal.
Iranian hardliners view their support for these groups as vital to their regional strategy, and they have firmly rejected any pressure to limit such support. For moderates like Pezeshkian, balancing the need for regional influence with the desire for economic relief from sanctions would be a delicate challenge.
A potential diplomatic breakthrough could also be influenced by recent shifts in the Middle East. In March 2023, Iran and Saudi Arabia announced a historic agreement to restore diplomatic relations, signalling a thaw in regional rivalries. This shift could complicate the US-Iran dynamic, especially as Saudi Arabia moves closer to Iran on issues like the situation in Gaza. As Saudi Arabia distances itself from Israel, the broader geopolitical landscape in the region is changing, setting up another diplomatic challenge for the US.
Despite the deep divisions and complexities in US-Iran relations, there remains a possibility for diplomatic engagement under a second Trump term. Reformists like Pezeshkian see Trump’s deal-making approach as a potential pathway to easing sanctions and stabilising the Iranian economy. However, any agreement would require Iran to make significant concessions, particularly regarding its nuclear programme and regional influence. The challenge for Trump is finding a balance that satisfies competing political pressures, particularly from the hawkish Republican constituency in the US, the Israeli government and hardline factions within Iran.