Thread by @yarbatman

1. Trump is being misled by his advisors. Yes, #Iran does want to talk to the U.S. But that is because over the last few months Iran's leaders have assessed themselves to be in a position of strength, shrugging off "maximum pressure" sanctions.

That's actually a good thing...

https://twitter.com/realDonaldTrump/status/1159522492324687877

2. "Maximum pressure" started in earnest in November after 11 months of Iran's currency losing value, of inflation rising, and of foreign companies pulling out of the market. It looked like Iran's economy could be pushed into a spiral by the return of secondary sanctions.

3. But over the last three months, Iran's currency has regained value, inflation has slowed, and Iran's has begun to export oil to China in defiance of US sanctions. Regional trade has grown significantly and Iran is sourcing plenty of hard currency (USD!) to grease its economy.

4. The government's economic coordination has improved. The current central bank governor is assertive and apparently empowered. New systems have been put in place to control FX markets and new investment programs are being rolled-out to rekindle growth.

5. No doubt the Iranian people are still hurting--unemployment has risen and economic prospects remain dim. But the hardship faced by many households is darker than the overall macroeconomic outlook. At a state level, Iran is in a better position than might have been expected.

6. This could be the eye of the storm (and this may be one reason why Iran is interested in talks now). But in this particular moment, the economic circumstances do not equate to Iran being "desperate."

Iran perceives itself in a strong position in other ways too.

7. The flare-ups in the Strait of Hormuz have exposed A) the limited US appetite for military intervention B) the challenges of coalition building C) the fear of escalation by regional actors. Iran has exposed for the UAE/KSA that they can't trust Trump to have their back.

8. Sure, the parties to the nuclear deal have failed to fully defend the JCPOA, but it is actually remarkable that they haven't fallen into line with the Trump policy two years after Trump "decertified" the deal, even if Iran has caused friction with some of its recent moves.

9. Plus, while Iran is banking on Trump being reelected, he might lose in just over a year. And the democratic candidates have signaled early-on that they will seek to be more pragmatic on Iran, even if they too will pursue a new deal beyond the JCPOA.

10. So Iran perceives itself to be in a position of strength. There is some hubris at play, but the perception is understandable.

Now here is the important part... Iran *not being desperate* is a good thing if we want a new understanding or a new deal between the US and Iran.

11. If diplomacy is going to lead to a win-win deal that helps the US and Iran move past the bitter JCPOA episode, both sides need to perceive that they are entering negotiations from a position of strength. Not only does this make talks politically more palatable...

12. But it also increases the likelihood that each side will be ready to make meaningful concessions to the other. What Trump doesn't realize is that the use of sanctions to cripple Iran and to humiliate its leaders is being advanced by his advisors to make diplomacy *harder.*

13. That's why Macron has told Trump that a small move on sanctions relief (oil waivers) could help kickstart talks. The gesture would work because it would be an acknowledgment of Iranian strength, as well as an inducement to join the US at the table.

Talks are in reach...