A defiant Iranian President Hassan Rouhani boasted Thursday that there is “no limit” to his country’s level of uranium enrichment – just days after European powers raised concerns about the Islamic Republic backing away from a 2015 nuclear deal.
Rouhani’s comments follow an announcement from Iran in the wake of Gen. Qassem Soleimani’s killing that the country will no longer respect limits set on how many centrifuges it can use to enrich uranium.
“We are enriching more uranium before the deal was reached,” Rouhani said during a televised speech before the heads of banks. “Pressure has increased on Iran but we continue to progress.''
“We have no limits on the nuclear file, and we are increasing enrichment every day,” he added, according to a tweet from the Lebanon-based Al-Mayadeen Channel.
Technicians work at the Arak heavy water reactor's secondary circuit, as officials and media visit the nuclear site near Arak, Iran.
(AP/Atomic Energy Organization of Iran)
But Iran so far has only modestly increased its nuclear activity, the Associated Press says.
In recent months it has boosted its enrichment of uranium to 4.5 percent — higher than the 3.67 percent limit set by the agreement but far from the 20 percent enrichment it was engaged in before the deal. Uranium must be enriched to 90 percent to be used in a nuclear weapon.
President Trump withdrew from the nuclear agreement in May 2018, in part because it did not address Iran's support for armed groups across the region and its ballistic missile program. The U.S. has since imposed crippling sanctions on Iran's economy.
Iran continued to abide by the agreement until last summer, when it began openly breaching some of its limits, saying it would not be bound by the deal if it saw none of its promised economic benefits.
Britain, France, and Germany, which signed the Joint Comprehensive Plan of Action in 2015, sent a letter to the European Union’s foreign policy chief on Tuesday saying that they are triggering its “dispute mechanism” – which begins a process that could result in the U.N. restoring sanctions it previously lifted under the agreement if Iran continues to back away.
“We have therefore been left with no choice, given Iran’s actions, but to register today our concerns that Iran is not meeting its commitments,” the foreign ministers of the three countries wrote.
Fox News' Greg Norman and the Associated Press contributed to this report.
The agreement signed Wednesday will have Beijing purchase an additional $200 billion of US goods and services over the next two years.
The increase in purchases will be compared to 2017, before the trade war started. China imported over $185 billion in total US goods and services that year.
In exchange, Washington has agreed to reduce tariffs on $120 billion in Chinese products from 15% to 7.5%.
Taken together, the phased purchases by China would result in a dramatic surge in US exports. Total exports to China would increase to over $260 billion in 2020, and roughly $310 billion in 2021 if the deal holds.
"We think it is highly challenging for China to import $200 billion more goods and services from the US over the next two years without reducing imports from elsewhere," said analysts at UBS.
Agricultural goods account for a big chunk of the new purchases. Under the agreement, China will buy an additional $12.5 billion of those goods in year one, and then $19.5 billion in year two,compared to 2017.
Among the products it has promised to buy are soybeans, pork, cotton and wheat. Trade in soybeans and pork in particular has been hit hard as tensions have escalated between the world's two largest economies.
Both products were among thousands of US goods hit by Chinese tariffs in July 2018, in response to the Trump administration's taxes on $34 billion of Chinese goods.
In addition to the purchases announced on Wednesday, the initial deal provides better protection to American companies that have long complained about thefts of their intellectual property and trade secrets.
It also loosens up requirements for banks wanting to operate in China and imposes anti-counterfeiting measures that, if broken, would lead to penalties.
Beijing's pledges go further than China has in the past, but the agreement doesn't require the government to change any laws or regulations.
And China still didn't give ground on some of the most important issues for America, such as demands for cuts to state subsidies that could trigger a fundamental overhaul of how the Chinese economy works. That is among several sticking points that the two sides are expected to discuss for the next phase of the agreement.
For now, the deal is expected to bring some relief to Chinese manufacturers, who have suffered from tariffs that made their goods more expensive. It also lifts some of the uncertainty that had been clouding companies' decisions to invest in China.
Additionally, the agreement fits neatly into one of Beijing's key goals: to diversify its economy and reform its financial system. China's central bank said in a statement Thursday that the deal would help it continue to open up the country's financial sector.
Going forward, a senior US administration official told reporters that Washington would be "actively monitoring" data sources from both countries to ensure that China is fulfilling its promise.
— CNN's Donna Borak and Laura He contributed to this report.
The U.S.-China trade deal lays out an aggressive schedule for ramping up China’s purchases of American farm products, manufactured goods, business services and oil and natural gas to levels never seen before—an increase of $200 billion over two years.
Can China absorb that much from the U.S., and if so can the U.S. deliver?
The two governments answer in the affirmative to both questions. But trade experts say the targets for 2020 and 2021 are so ambitious that they could stretch the capacity of even the world’s two largest economies.
What’s more, they say, achieving the targets would likely require significant government mandates put on China’s $14 trillion economy, which would be at odds with Washington’s support of market-driven business decisions.
“This is essentially the administration saying, ‘We’ve given up on saying we want you to become more market-oriented,’” said
Chad Bown,
a senior fellow at the Peterson Institute for International Economics.
“The targets aren’t impossible since the Chinese control purchasing in most of the economy,” said
Derek Scissors,
a resident scholar at the American Enterprise Institute. But Mr. Scissors and others note that if the U.S. goods are simply diverted away from other countries and toward China, there could be little net benefit to the U.S. economy.
The text of the deal, signed Wednesday in Washington, spells out for the first time agreed-upon purchases across four broad categories: agriculture, energy, manufacturing and services. For each category, the increase ramps up in the second year of the deal, with U.S. exports to China nearly doubling by 2021.
U.S. trade agreements historically have focused on opening foreign markets to allow freer trade between businesses, not setting levels of trade on a government-to-government basis.
The deal specified targets for Chinese purchases, measured against 2017 levels. In 2020, China must buy at least $77 billion extra of U.S. goods and services, and in 2021 at least $123 billion extra, for a two-year addition of $200 billion.
The U.S. and China signed a deal marking a truce in the trade war between the two nations, with President Trump saying it was a “momentous step” toward a future of "fair and reciprocal trade." Photo: Wang Ying/Xinhua via ZUMA Wire
In 2017, the U.S. exported $186 billion in goods and services to China, and the most recent data for 2019 puts the figure at about $160 billion. To meet the targets, exports to China would have to rise to around $262 billion in 2020 and $309 billion in 2021, according to a Wall Street Journal analysis. For this year, that amounts to an increase of around 60%, in what would be an unprecedented jump in bilateral trade.
The trade deal didn’t detail which categories of manufacturing were expected to provide the added sales. Negotiators have said there are specific targets but that they are being kept confidential to avoid distorting markets.
Trade groups said the signing was a positive step, but that further tariff reductions are needed on both sides before U.S. companies can expect to realize big gains in exports.
Dennis Slater,
president of the Association of Equipment Manufacturers, said his group hopes the pact “will pave the way for the elimination of the remaining tariffs and increase U.S. exports to the Chinese market.”
Nathan Jeppson,
chief executive of Northwest Hardwoods Inc., one of the largest U.S. producers of hardwood lumber, said his company isn’t forecasting a near-term increase in purchases by Chinese manufacturers of furniture and other wood products.
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“It is very much cautious optimism,” Mr. Jeppson said. “We aren’t going to change anything about our production plans.”
The trade war has restrained commerce between the U.S. and China, but the value of goods exchanged is still up by more than 40% from levels in 2017, the year that serves as the baseline for the deal’s targets.
The biggest chunk of the $200 billion in increased purchases by China would come from U.S. manufacturers. The deal calls for manufacturing trade in 2020 to climb by $32.9 billion from the baseline level and be $44.8 billion above baseline in 2021.
President Trump has often touted the agricultural purchases in the deal as one of its centerpieces. To meet the goal for 2021, China would need to import a little over $40 billion in U.S. agricultural goods—a nearly 90% increase from 2017, according to the Journal’s calculations.
In addition to the purchase targets, China has agreed to steps that allow more market access for U.S. dairy products, poultry, beef, fish, rice and even pet food.
With Beijing and Washington set to seal a first-stage trade pact, U.S. farmers are optimistic about the future. But some experts wonder if China's commitment to the agreement will live up to the White House's expectations. Photo: Scott Olson/Getty Images
The aggressive targets met with skepticism from some farm groups.
Michelle Erickson-Jones,
a Montana wheat grower and spokeswoman for Farmers for Free Trade—a group that opposes tariffs—said that it remains to be seen whether the deal will deliver any meaningful relief “for farmers like me.”
“This deal does not end retaliatory tariffs on American farm exports, makes American farmers increasingly reliant on Chinese state-controlled purchases and doesn’t address the big structural changes the trade war was predicated on achieving,” she said.
Many grain traders said they would remain skeptical of the deal until purchases are actually reported.
“We want to see exact details by commodity and we want to see purchases,” said
Rich Nelson,
chief strategist at commodity brokerage Allendale Inc.
Despite the pledge of greater purchases from China, the most actively traded soybean futures contract on the Chicago Board of Trade finished Wednesday down 1.4% at about $9.29 a bushel, while corn fell 0.4% to about $3.87 a bushel.
While President Trump has touted agricultural purchases by the Chinese, the targets are even more aggressive in energy.
In 2017, the U.S. exported to China about $7.6 billion of the energy products specified in the deal. Meeting its goals would require energy exports of $26 billion in 2020 and over $41 billion in 2021. That figure represents more-than-quintupling energy exports, the Journal calculated.
American capacity to export energy, especially liquefied natural gas, has grown in recent years, but accommodating that volume could require a significant investment in energy infrastructure.
Beyond 2021, the U.S. and China said their deal envisions continued rapid escalation in purchases.
“The Parties project that the trajectory of increases in the amounts of manufactured goods, agricultural goods, energy products, and services purchased and imported into China from the United States will continue in calendar years 2022 through 2025,” according to the text of the deal.
—Austen Hufford and Kirk Maltais contributed to this article.
Rouhani also said the country's nuclear industry was better off today during his address at the 59th Iranian Central Bank General Assembly in Tehran that was broadcast live on Iranian state television.
"Our daily enrichment is today more than before signing the (JCPOA) agreement," Rouhani said, referring to the Joint Comprehensive Plan of Action, the official name of the 2015 nuclear deal. Rouhani offered no specifics on how much more uranium is now being enriched.
Signed by Iran and the US, France, Russia, China and Germany -- a group known as the P5+1 -- after two years of intense negotiations, the deal was intended to limit Iran's civilian nuclear program and prevent it from developing nuclear weapons in exchange for sanctions relief.
But the deal began to unravel when the US walked away from it in 2018 and reimposed sanctions on Iran. Tehran has responded in recent months by pulling back from some of its commitments under the pact.
Earlier this week, the so-called E3 countries -- Germany, France and the UK -- triggered a dispute mechanism in the deal, citing Iran's breaches of some of the limits in the agreement.
Rouhani on Thursday accused the P5+1 countries of backing away from the deal, and said Iran had acted accordingly.
"We didn't sit around, when they (P5+1) reduced their commitment (to JCPOA), we also reduced our commitment," Rouhani said.
"I'd like to say the current situation is not an easy one, but we are aware that world security, world politics and the world economy are closely connected," he added.
Since pulling out of the deal in 2018, the Trump administration has introduced a "maximum pressure" campaign of harsh sanctions, but the European Union has called for the deal to be upheld.
EU Foreign Affairs Chief Josep Borrell met with Iranian Foreign Minister Mohammad Javad Zarif in New Delhi on Thursday to call for its preservation.
And despite invoking the dispute mechanism in the deal, the foreign ministers of France, Germany and the UK said earlier this week that they remain committed the pact.
CNN's Ivana Kottasová and Stephanie Halasz contributed to this report.
Iranian President Hassan Rouhanihas said that his country is enriching more uranium than Tehran did before it agreed to a nuclear deal with world powers in 2015.
"We are enriching more uranium before the deal was reached ... Pressure has increased on Iran but we continue to progress," Rouhani said on Thursday in a televised speech.
More:
Iran has gradually scaled back its commitments under the nuclear deal, signed with the US, China, Russia, Germany, France and the UK, in retaliation for Washington's withdrawal from the pact in 2018 and its reimposition of sanctions that have crippled the country's economy.
Earlier in the week, the United Kingdom, France and Germany challenged Tehran over breaking the limits set out in the deal.
Inside the base targeted by Iranian missiles
The European nations announced that they triggered the dispute mechanism provided for in the landmark agreement in order to force Tehran to honour its commitments under the accord, formally known as the Joint Comprehensive Plan of Action (JCPOA).
On Thursday the EU's top diplomat Josep Borrell held "frank" direct talks with Iran's Foreign Minister Mohammad Javad Zarif in New Delhi.
"In a frank dialogue, they discussed the latest developments around the Joint Comprehensive Plan of Action," the European Union said in a statement.
The face-to-face talks on the sidelines of a conference were the first following a series of telephone calls since a US drone strike killed top Iranian general Qassem Soleimani on January 3.
EU officials have said Iran already expressed anger at the European move by telephone.
'Prevent military confrontation'
Tensions in the region have simmered in recent months after a series of attacks in the Gulf region that the US blamed on Iran and aligned groups, despite denials from Tehran.
Fears of a military escalation soared in early January after the assassination of Soleimani in an air strike in Baghdad, prompting Iran to fire a barrage of missiles at a military base housing US troops in Iraq.
In his speech on Thursday, Rouhani said that the Iranian retaliation - which caused significant material damage but no casualties according to the US military - had strengthened Iranian deterrence against the "threats" of US President Donald Trump.
But despite the continuing tensions, Rouhani said Tehran was working daily "to prevent military confrontation and war" and that dialogue with the world remained "possible".
The 2015 nuclear deal imposed restrictions on the Iranian nuclear programme in exchange for a reprieve from international sanctions.
After unilaterally withdrawing, the US has reimposed a range of sanctions on Tehran and called for negotiations over a new accord.
Iran has rejected the idea of negotiating a new deal while it is under sanctions.
In response to the US move, Tehran has begun enriching uranium above the cap agreed in the deal and taken further steps to enhance its nuclear programme, while also accusing the European parties to the deal of failing to live up to their own commitments to provide economic relief to Tehran.
Iran had been enriching uranium at 20 percent purity before it signed the deal, which capped enrichment at 3.67 percent.
Al Jazeera's Assed Baig reporting from Tehran said that Rouhani had sent a defiant message to the world, saying that Iran is reducing committments, but also adding that these reductions are reversible if European countries return to their obligations to that deal.
"He's saying to European countries that they need to stand up to the US," Baig said.
"These sanctions have hit Iran's oil sector, the banking sector and the economy and he accepted this - that Iran's oil exports have been reduced, but the economy is still working, according to Rouhani."
Rouhani defended the 2015 nuclear deal in his speech saying, "we have proven in practice that it is possible for us to interact with the world".
Iranian President Hassan Rouhanihas said that his country is enriching more uranium than Tehran did before it agreed to a nuclear deal with world powers in 2015.
"We are enriching more uranium before the deal was reached ... Pressure has increased on Iran but we continue to progress," Rouhani said on Thursday in a televised speech.
More:
Iran has gradually scaled back its commitments under the nuclear deal, signed with the US, China, Russia, Germany, France and the UK, in retaliation for Washington's withdrawal from the pact in 2018 and its reimposition of sanctions that have crippled the country's economy.
Earlier in the week, the United Kingdom, France and Germany challenged Tehran over breaking the limits set out in the deal.
Inside the base targeted by Iranian missiles
The European nations announced that they triggered the dispute mechanism provided for in the landmark agreement in order to force Tehran to honour its commitments under the accord, formally known as the Joint Comprehensive Plan of Action (JCPOA).
On Thursday the EU's top diplomat Josep Borrell held "frank" direct talks with Iran's Foreign Minister Mohammad Javad Zarif in New Delhi.
"In a frank dialogue, they discussed the latest developments around the Joint Comprehensive Plan of Action," the European Union said in a statement.
The face-to-face talks on the sidelines of a conference were the first following a series of telephone calls since a US drone strike killed top Iranian general Qassem Soleimani on January 3.
EU officials have said Iran already expressed anger at the European move by telephone.
'Prevent military confrontation'
Tensions in the region have simmered in recent months after a series of attacks in the Gulf region that the US blamed on Iran and aligned groups, despite denials from Tehran.
Fears of a military escalation soared in early January after the assassination of Soleimani in an air strike in Baghdad, prompting Iran to fire a barrage of missiles at a military base housing US troops in Iraq.
In his speech on Thursday, Rouhani said that the Iranian retaliation - which caused significant material damage but no casualties according to the US military - had strengthened Iranian deterrence against the "threats" of US President Donald Trump.
But despite the continuing tensions, Rouhani said Tehran was working daily "to prevent military confrontation and war" and that dialogue with the world remained "possible".
The 2015 nuclear deal imposed restrictions on the Iranian nuclear programme in exchange for a reprieve from international sanctions.
After unilaterally withdrawing, the US has reimposed a range of sanctions on Tehran and called for negotiations over a new accord.
Iran has rejected the idea of negotiating a new deal while it is under sanctions.
In response to the US move, Tehran has begun enriching uranium above the cap agreed in the deal and taken further steps to enhance its nuclear programme, while also accusing the European parties to the deal of failing to live up to their own commitments to provide economic relief to Tehran.
Iran had been enriching uranium at 20 percent purity before it signed the deal, which capped enrichment at 3.67 percent.
Al Jazeera's Assed Baig reporting from Tehran said that Rouhani had sent a defiant message to the world, saying that Iran is reducing committments, but also adding that these reductions are reversible if European countries return to their obligations to that deal.
"He's saying to European countries that they need to stand up to the US," Baig said.
"These sanctions have hit Iran's oil sector, the banking sector and the economy and he accepted this - that Iran's oil exports have been reduced, but the economy is still working, according to Rouhani."
Rouhani defended the 2015 nuclear deal in his speech saying, "we have proven in practice that it is possible for us to interact with the world".
