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The Trump team's trade sanctions were not what Iran hawks wanted

Any public impression that Trump is walking back his aggressive posture toward Iran would be expected to irk the president.
Image: United States National Security Adviser John Bolton talks to the Miami Herald  on Latin American policy at the National Historic Landmark Miami Freedom Tower on Nov. 1, 2018.
United States National Security Adviser John Bolton talks to the Miami Herald on Latin American policy at the National Historic Landmark Miami Freedom Tower on Nov. 1, 2018.Emily Michot / Miami Herald via AP

WASHINGTON — President Donald Trump's latest move on Iran is exposing tensions among his top national security advisers over how far to take his "maximum pressure" campaign.

Since pulling out of the Iran nuclear deal in May, Trump has publicly projected an uncompromising approach toward ramping up pressure on Tehran, even tweeting Friday a photo of himself stylized as a movie poster with the title "Sanctions Are Coming." So Iran hawks both within and outside of his administration were taken aback to learn that the administration's new sanctions fall notably short of a zero-tolerance policy, five individuals familiar with the deliberations said.

John Bolton, Trump's national security adviser, and those in his hawkish camp have wanted as few exceptions as possible to reimposed U.S. sanctions targeting Iran's lucrative oil sector, a key point of leverage as the country struggles economically. The Trump administration has been saying for months that all countries need to completely eliminate all oil imports from Iran or face U.S. sanctions.

U.S. Secretary of State Mike Pompeo speaks during the United Against Nuclear Iran Summit on the sidelines of the United Nations General Assembly in New York on Sept. 25, 2018.Darren Ornitz / Reuters file

"Maximum pressure means maximum pressure," Secretary of State Mike Pompeo said Friday.

Nevertheless, Pompeo said the administration will grant waivers to eight nations that have significantly reduced their imports, allowing them to keep importing some oil from Iran. Pompeo said two of the eight will soon get to zero imports but just need more time. Pompeo declined to name any of the countries getting waivers, but two people briefed on the waivers tell NBC News that major Asian buyers of Iranian oil — including U.S. allies India and South Korea — will get waivers.

And despite insisting for months that Iran must be kicked off of SWIFT, the dominant global financial messaging service, the Trump administration stopped short of threatening sanctions unless Iran is totally forced off the system. Instead, Treasury Secretary Steven Mnuchin said the administration was developing a list of some Iranian banks that must be removed. But he acknowledged some financial transactions with Iran through the system will be allowed to continue.

Even in the hours before Pompeo and Mnuchin announced the moves Friday, White House officials were still not fully aware of the specifics of what will be allowed regarding oil waivers and SWIFT, several individuals briefed on the discussions said. Indeed, Pompeo told reporters that negotiations with some countries about the waivers were still ongoing ahead of Monday's deadline.

A senior administration official pushed back on the notion that there was disagreement between the White House, the State Department and Treasury, saying that Trump and his National Security Council had been fully briefed.

A National Security Council spokesman wouldn't discuss Bolton's views about the sanctions, telling NBC News: "We don't comment on internal deliberations." Treasury declined to comment.

Any public impression that Trump is walking back his aggressive posture toward Iran would be expected to irk the president.

Trump has made his tough stance toward Iran a hallmark of his foreign policy. He and Bolton have generally brushed off the pleas from allies like France, Germany and the U.K. to allow Iran to continue conducting business with foreign countries that had been permitted under the nuclear deal struck by former President Barack Obama and world powers.

"I don't think this case is closed yet," said Richard Goldberg of the Foundation for Defense of Democracies, a think tank that advocates hawkish policies toward Iran. "When the president discovers how weak this made him look, he may order Treasury to 'take the hill,' so to speak."

Initially, Bolton had been scheduled to issue a public statement on-camera on Friday announcing the new round of sanctions. But his appearance was later canceled. Instead, Mnuchin and Pompeo made the announcement. It was unclear whether the change in plans for the roll-out was related to Bolton's misgivings about the forthcoming policy.

The perception that the Trump administration is easing up on its "maximum pressure" campaign has also irked the president's traditional allies in Congress. Sen. Lindsey Graham, R-S.C., a vocal Iran critic, said Friday that the U.S. must "stay strong against the Iranian regime."

"I share the concerns expressed by my colleagues regarding the potential 'softness' of Iran sanctions," Graham said in a statement.

In August, 16 Republican senators wrote to Mnuchin demanding Iran be totally cut off from the SWIFT system. And Sen. Ted Cruz of Texas recently introduced legislation that would require the Trump administration to impose sanctions on SWIFT members if the messaging system fails to suspend Iran.

The sanctions against Iran's crude oil exports mark the second phase of Trump's decision in May to withdraw from the 2015 nuclear deal and reimpose sanctions that had been lifted under its terms. The first set of sanctions that were reimposed on Iran targeted the country's automotive industry, civil aviation sector and the trade of gold and other metals.

The administration gave countries several months to prepare for the more biting oil sanctions. During that time, the countries set to receive waivers made their case to senior Trump administration officials, arguing that too precipitous a reduction would destabilize global energy markets and drive up the price of oil.

Although the U.S. can't force SWIFT, based in Belgium, to kick off Iranian banks, it could threaten to impose sanctions on members of SWIFT's board — including major U.S. bank chiefs — if it doesn't acquiesce. The Trump administration wants Iranian banks removed from the system to make it harder for Iran to transfer funds into the country and shore up its beleaguered currency.

But European countries and other supporters of the Iran deal say it would be even harder to track money-laundering and terror financing if Iran weren't on the system. The Europeans have even threatened to create their own alternative payment mechanism to continue business with Iran that would bypass the U.S. and the threat of American sanctions.

Abigail Williams contributed.