Trump's Iran Threats Dial Up Drama for UN Gathering of Leaders

(Bloomberg) -- President Donald Trump enters the United Nations General Assembly this week with America’s closest allies frustrated over fraying ties and the entire world wary as it awaits critical U.S. decisions on Iran and North Korea.

Again.

As a newcomer at the annual gathering of world leaders last year, Trump delivered a speech bristling with threats and his repeated insistence that countries should respect each other’s sovereignty.

He returns this year amid a trade war with China, unprecedented tension with allies Canada and Germany, and a showdown with NATO partner Turkey. A promised Mideast peace deal hasn’t materialized. Relations have improved with North Korea -- the antagonist of Trump’s 2017 speech -- while the Iran nuclear deal is in tatters.

With more than 100 foreign leaders in New York this week, there’s an opportunity to stitch up some of those wounds, or blow them wide open.

“He will keep other leaders at the edge of their seats,” said Richard Gowan, a senior fellow at the United Nations University’s Center for Policy Research who teaches at Columbia University.

Read a QuickTake on the widening Iran-U.S. divide under Trump

Trump kicked off the week on Monday chairing a global call to action on drugs, calling on countries around the world to reduce demand for narcotics and cut off supply.

He offered cautious praise for the United Nations, saying that the organization “has tremendous potential” and that potential is being met “slowly but surely.”

He will address the full General Assembly on Tuesday and then host a UN Security Council session on Wednesday. Trump threw a wrench into the works on Friday by tweeting that the subject of the Security Council meeting would be Iran, after White House aides had insisted the agenda would broadly address proliferation of weapons of mass destruction.

That opens the prospect that Iranian President Hassan Rouhani may attend and confront the U.S. president face-to-face. Trump may also find himself publicly isolated, as key U.S. allies on the council including France and the U.K. have criticized his exit from the Iranian nuclear deal signed by his predecessor.

It may be a drama the president welcomes.

The Islamic Republic’s economy is struggling since Trump re-imposed U.S. sanctions and threatened more unless the nuclear deal is renegotiated. The plunging rial and rising unemployment have shaken up a regime that analysts say is seriously concerned about its stability. Whether or not Europeans can strike a side deal with Iran to keep the nuclear accord alive, it is far from certain that Iran can lure investors bold enough to invest in an economy in free-fall.

Oil Sanctions

“The bed is pretty much made the way it is. It’s fairly obvious the Iranians have little to go on and that Trump’s approach is working, with business people and banks walking away from Iran,” said Ray Takeyh, a senior fellow at the Council on Foreign Relations. “Diplomacy is important, but the battle has already been won in some way.”

Sanctions kicking in around Nov. 4 will go further, punishing countries -- including European allies -- whose companies continue to buy Iranian crude. The country’s oil exports have plunged about 35 percent since April, more than expected, in anticipation.

Trump’s primary message for European leaders will be that the nuclear deal is a failure and European countries are leaving Iran after determining it makes more sense for them to maintain business ties with the U.S., according to a senior administration official who discussed Trump’s UN plans on the condition of anonymity.

But the official downplayed the idea that the U.S. withdrawal from the Iran deal is eroding relationships with longtime allies. Trump plans to meet privately with both British Prime Minister Theresa May and French President Emmanuel Macron on the sidelines of the UN meeting, White House Press Secretary Sarah Sanders said.

In addition to Iran’s nuclear ambitions, Trump is likely to take on the country over forces and money it has poured into Syria, Yemen and Iraq. In his UNGA address last year, Trump called for "the entire world to join us in demanding that Iran’s government end its pursuit of death and destruction,” and may say something similar this year.

Trump has also said he’d be willing to meet Iranian leaders, and the UN gathering is a possible venue. But Supreme Leader Ayatollah Ali Khamenei, who has the final say on state affairs, has rejected talks “at any level” with the U.S., saying the Trump administration has proved that it cannot be trusted.

“The Iranians are hoping President Trump will be a mirage, a one-term U.S. president,” said Alex Vatanka, a senior fellow at the Middle East Institute in Washington. “It’s a question of buying time until a new administration comes and takes a softer position. The sanctions are biting and the Iranians are buckling down.”

No More Madman

At the UN a year ago, Trump called Kim Jong Un “obviously a madman” for his escalation of nuclear and missile tests and famously labeled him “Rocket Man.” In what was a break of precedent at the time, Kim personally responded by calling Trump “mentally deranged.”

That’s all changed. Tensions subsided after Trump agreed to a historic summit with Kim in Singapore in June. The administration insists North Korea’s abandonment of nuclear weapons is on track despite limited visible progress. The two leaders regularly praise each other publicly and exchange private correspondence, and both have said they want to meet again soon.

On Monday, South Korean President Moon Jae-in will brief Trump on his meeting with Kim last week in Pyongyang.

At the summit last week, Kim agreed to dismantle a key missile test site. He also said he would shutter North Korea’s main Yongbyon nuclear production site if the U.S. takes reciprocal actions, though it wasn’t clear what he meant.

At the same time, the U.S. has ramped up criticism of Russia for what it says are breaches of the international sanctions regime against Pyongyang. The U.S. ambassador to the UN, Nikki Haley, said last week Russia is “actively undermining” sanctions it supported 11 times in the past, but she was restrained in her criticism of China, which has the closest economic ties with Pyongyang.

Russia rejected the accusations, and the president won’t have a chance to sew up those wounds. Vladimir Putin, like last year, is skipping the UNGA entirely.

As UNGA unfolds, world leaders and top corporate executives will also gather in New York on Sept. 26 to discuss economic and social trends during a forum hosted by Michael R. Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News. He has told the New York Times that he’s considering a campaign for president as a Democrat. Participants will include U.K. Prime Minister Theresa May, Turkish President Recep Tayyip Erdogan and Malaysian Prime Minister Mahathir bin Mohamad.

--With assistance from Nick Wadhams, Jennifer Epstein and Toluse Olorunnipa.

To contact the reporters on this story: David Wainer in New York at dwainer3@bloomberg.net;Justin Sink in Washington at jsink1@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Mike Dorning

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