Sonny Shiu-Hing Lo*

Shortly after the US and Iran reached a Memorandum of Understanding (MoU) with digital signatures on June 14, Israel then attacked Lebanon, and the Israeli move immediately forced the US and Iranian side to postpone their delegation visit to Switzerland on June 19. Fortunately, the latest development is that Israel and Hezbollah have renewed their truce after their conflict almost jeopardized the US-Iran deal. On June 20, US envoy Steve Witkoff is travelling to Switzerland after a short-lived postponement of his scheduled trip. At the same time, US President Donald Trump’s son-in-law Jared Kushner is expected to join Witkoff. If the US side is going to meet the Iranian counterpart, both sides will have to reach a final agreement in a 60-day deadline.

The 14-point text of the US-Iran MoU, which was revealed by the media, shows that both US and Iran want to stop their conflicts in an apparently “win-win situation.” Yet, a closer look at the text shows that the US side appears to lose far more than what the Iranian side gains.

Immediate military cessation and the domestic balance

First, the US and Iran declare an immediate termination of military operations on all fronts, including those in Lebanon (CNN, June 18, 2026). Both sides agree to ensure the territorial integrity and sovereignty of Lebanon.

The challenge to the first point is indeed whether the US will continue to rein in Israel’s attacks on southern Lebanon. The US Vice President, James D. Vance, expressed his displeasure with Israel on June 19 when he criticised the Israeli cabinet members for not only criticising US President Trump, who has been supporting Israel all along, but also ignoring the fact that two-thirds of Israeli military weapons have been provided and supported by the US and its taxpayers. While Vance was critical of Israel, President Trump was more diplomatic and told the public on June 20 that he praised Israeli Prime Minister Benjamin Netanyahu, who was a “warrior Prime Minister” and whose credit should be acknowledged (Times of Israel, June 20, 2026).

Second, the US and Iran undertake to respect each other’s sovereignty and territorial integrity and to refrain from interfering with each other’s internal affairs.

Strictly speaking, this second point appears to signal a victory of Iran, whose sovereignty and territorial integrity were arguably violated by the sudden US attack on February 28. Moreover, the US originally aimed at achieving regime change in Iran by not only killing the supreme leader Ali Khamenei but also supporting and grooming the exiled son of the last Shah, Reza Pahlavi.

Regime resilience and maritime blockades

However, Pahlavi’s power base and support in Iran have remained quite weak, while Iran’s top clerics quickly installed the son of Ali Khamenei, Mojtaba Khamenei, as the next supreme leader in early March. Above all, the sudden US attack on Iran solidified the latter’s ruling regime rather than providing an excellent opportunity for the local dissidents to rise up against the government.

Unlike Venezuela whose President Nicholas Maduro was toppled and arrested by the US force on January 3 and where the ruling elites politically and economically “bowed” to the US quickly, Iran’s regime remains resilient and much stronger with its Revolutionary Guard holding onto power tightly with legitimacy. As such, point two of the MoU appears to be more a victory of Iran than that of the US.

Third, both sides are committed to negotiating a final deal within sixty days. The US and Iran are delaying for a more comprehensive agreement and may extend talks if both parties want more dialogue.

Fourth, the US will begin the removal of its naval blockade against Iran within thirty days, while Iran will restore the traffic of vessels during the same period.

The fourth point is arguably another victory of Iran, which succeeded in using its blockade of the Strait of Hormuz as a bargaining chip to secure some concessions from the US side. In fact, President Trump publicly admitted that he would not like to envisage any economic disaster in the world for fear that any continuous war with Iran would heavily affect the maritime traffic along the Strait of Hormuz, which normally oversaw 20 per cent of the global oil consumption and 25 per cent of all maritime oil trade.

Financial concessions and nuclear verification

Aspiring to be seen as peacemakers, President Trump and his negotiators must achieve a temporary deal with Iran after a brief period of conflicts that targeted at Iran’s major military installations and its three major nuclear sites in Natanz, Fordow, and Isfahan.

The fifth point of the MoU focuses on the safe passage of sea route. Iran will make arrangement for the safe passage of commercial vessels without charge from the Persian Gulf to the Sea of Oman, and vice versa. Furthermore, Iran will discuss with Oman and other Gulf states to define the future administration and maritime services in the Strait of Hormuz. This point is arguably an attempt by the US to achieve a win-win situation with Iran and other Gulf states.

The MoU reached by the US and Iran is an important and a positive move pointing to the peaceful settlement in the Middle East. Although the content of the MoU clearly signals a victory of Iran, the US side has recognized the pragmatic necessity of stopping the conflicts for the sake of not only achieving peace in the Middle East but also averting any further oil crisis and economic shocks to the entire world

The sixth point of the MoU, however, is arguably another victory for Iran. It says that the US undertakes with regional partners to develop a plan with at least US$300 billion for the reconstruction and economic development of Iran. Actually, immediately after the US attack on Iran in February, Iran made such a demand for the US to pay for its reconstruction. As such, point six of the MoU is clearly the victory for Iran. On June 19, President Trump openly admitted that the reconstruction amount was a huge one – an important concession made by the US side.

Point seven, namely the US termination of all types of sanctions against Iran, is also a gain from the Iranian side. This shows that economic sanctions imposed by the US will have to be abandoned after its military efforts at “punishing” Iran.

IAEA monitoring and historical parallels

Point eight of the MoU is more controversial. It says that Iran “reaffirms that it shall now procure or develop nuclear weapons,” and that both sides agree to “resolve the disposition of stockpiled enriched material pursuant to a mechanism that will be mutually agreed upon.” This mechanism refers to the on-site supervision work of the International Atomic Energy Agency (IAEA), meaning that both sides will discuss the issue of enrichment and other matters related to the needs of Iran. The final deal between the US and Iran will confirm “the provisions of this paragraph.”

In other words, both US and Iran will negotiate in detail how the IAEA will inspect Iranian nuclear sites, and the enrichment issue will be put on the negotiating table in the future. The progress of point eight of the MoU will depend on two factors: firstly trust-building on both the US and Iranian side, and secondly the effectiveness of IAEA inspections in the future.

Points nine and ten follow from point eight, namely both sides agree to maintain the status quo prior to the final agreement, and the US side will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associate services, including banking transactions, insurances, and transportations. In a sense, both sides are engaging in a gradual trust-building process before the final agreement will be reached.

The rest of the MoU focuses on the US move to unfreeze the assets of Iran, the need for an executive mechanism to monitor the implementation of the MoU, the necessity for both sides to start negotiations, and the need for the final deal to be endorsed by a binding resolution in the UN Security Council.

Partisan policy shifts and strategic costs

From a critical perspective, the MoU content represents more a victory of Iran and the failure of the US. This phenomenon has been admitted by the editorial of New York Times, which on June 15 said that “President Trump lost this war” (June 15, 2026). It said: “The preliminary deal ending President Trump’s four-month war with Iran is welcome but brings with it hard truths. Mr. Trump made a terrible mistake starting this war … The United States is emerging weaker – militarily, diplomatically and economically – and will pay strategic costs for years to come.” The Los Angeles Times on June 18 also remarked that the “long list of US concessions to Iran raises specter of a ‘lost war.’”

Judging from the MoU content, it looks like the current situation is reverting back to the political deadlock just prior to the July 2015 Obama-era deal, which was known as the Joint Comprehensive Plan of Action (JCPOA) and which included structures sanctions relief for Iran in exchange for concrete steps by Iran to dismantle and control its nuclear program. The JCPOA was a deal reached by the US, Iran, UK, France, Germany, China and Russia.

At that time, the Republican Party in the US criticised the deal. In May 2018, the first Donald Trump administration withdrew from this agreement, calling the Obama deal as a problematic one. However, the current MoU appears to mirror the 2015 scenario in which the Iranian side will have to control its nuclear program in exchange for the restraint from the US to impose economic sanctions.

Regional defense postures and existential threats

If this analysis is accurate, the tragedy of the US foreign policy is arguably its partisan nature, namely the Republican administration led by President Trump has changed the Democratic Party’s foreign policy toward Iran in such an oscillating way that war and conflicts with Iran could have been avoided.

The broader geopolitical implications of the current MoU are the regional politics in the Middle East and the immediate impact on Northeast Asian security in which North Korea has already declared itself as a “nuclear weapons state.”

According to media reports, Iran does not possess any nuclear weapons, but it maintains a highly advanced nuclear program in which its stockpiles of enriched uranium need the ongoing supervision work by the IAEA. The challenge is for both the US and Iranian sides to sit down on the negotiating table and to agree on how the IAEA will inspect Iran’s nuclear sites so that the US side will not impose economic sanctions on Iran. However, the crux of the problem is whether the threat of economic sanctions will continue to work. Above all, if trust does not exist between the US and the Iranian side, and also between Israel and Iran, the existing MoU can and will likely be a very fragile one.

Iran sees the Israeli restraint from attacking Lebanon as a precondition for the truce, but one baffling problem is that Israel under the Netanyahu leadership has remained quite hardline and hawkish in its view of national security.

Israel’s strategic boundaries and buffer spaces

Geographically speaking, Israel is located in a self-perceived “weak strategic position” with only 71 miles across the widest point and only 9 miles across its narrowest point (George Friedman, “Israel’s Strategic Problem,” Geopolitical Futures, June 2, 2026). As such, Israel’s defensive space remains arguably “weak,” and it has to defeat its enemies early in any war or conflicts. It is also eager to expand its security space and buffer zones not only by occupying Gaza but also repel the attacks from Hezbollah by invading southern Lebanon.

Geopolitically speaking, Israel’s strategic planners must try their best to maintain its regional hegemony and security buffer space. Although it is estimated that Israel possesses some 90 nuclear warheads, the Israeli authority has officially denied possessing any nuclear arsenal. Israel also said that it would not be the first country to introduce nuclear weapons into the Middle East.

The challenges to the US-Iranian deal include their trust-building process, the technical details of the IAEA inspection of Iran’s nuclear sites, and the ability of the US to rein in Israel’s assertive nationalism and its strategic moves to secure more buffer zones in the neighbouring regions

Having said that, it has viewed the rapid military rise of Iran, which possesses more drones and missiles than before, as a national security threat, and it has regarded Hezbollah as not only a “terrorist” organization but also a hostile proxy of Iran. As a result of seeing Hezbollah and Iran as posting double “existential” threats to the Jewish state, Israel has naturally adopted a militarily assertive policy toward Hezbollah and also a militarily hawkish policy lobbying the Trump administration for a more hardline approach to dealing with Iran.

Pakistani diplomacy and Northeast Asian challenges

Hence, the current MoU reached between the US and Iran will remain fragile. A workable final agreement will still depend on the ability of Iran to control its nuclear program’s development, the perception of Israel on its national security threats, and most importantly, the ability of the US administration to maintain a delicate balance of power in Middle East’s power politics and to rein in the assertive nationalism and military expansionism of Israel.

Another important geopolitical implication of the MoU between the US and Iran is the rise of the soft power of Pakistan, who has been playing a quite successful role as a middleman between the two conflicting countries. Prime Minister Shehbaz Sharif hailed the MoU as “a new dawn for peace” (The Express Tribune, June 20, 2026). Sustained and discreet diplomacy adopted by Pakistan led to a certain degree of trust-building between the US and Iran prior to their consensus over the MoU content. Pakistan’s ability to mediate diplomatically has made it a respected and effective mediator, contributing to resolving international conflicts and promoting global peace, as well as supporting regional stability in South Asia.

However, the next challenge to US President Trump shortly after the MoU with Iran is how he will deal with Northeast Asian security. In the recent G7 Summit, South Korean President Lee Jae Myung told President Trump that “time had come to pay attention to the North Korean issue” (AFP, June 19, 2026).

Trust-building and the paths forward

President Trump had met North Korean leader Kim Jong Un three times during his first term of the US administration, and he has recently posted a photo of himself and Kim Jong Un taken at a meeting in Singapore in 2018 – a gesture showing that he will likely tackle the North Korean issue soon. President Trump is scheduled to visit China in November for the APEC meeting in Shenzhen. It remains to be seen whether he will use this upcoming visit to lobby the Chinese side to persuade the North Korean side to return to the negotiating table. Given that North Korea has declared itself as a “nuclear weapons state,” it remains a challenge to the Trump administration to cope with the already changed position of North Korea in the coming months.

In conclusion, the MoU reached by the US and Iran is an important and a positive move pointing to the peaceful settlement in the Middle East. Although the content of the MoU clearly signals a victory of Iran, the US side has recognized the pragmatic necessity of stopping the conflicts for the sake of not only achieving peace in the Middle East but also averting any further oil crisis and economic shocks to the entire world.

The challenges to the US-Iranian deal include their trust-building process, the technical details of the IAEA inspection of Iran’s nuclear sites, and the ability of the US to rein in Israel’s assertive nationalism and its strategic moves to secure more buffer zones in the neighbouring regions. Amid the US-Iran MoU, Pakistan as a successful mediator has been expanding its soft power. Its diplomatic finesse has positive implications for regional and global peace. The next target of the Trump administration will be Northeast Asian security in which President Trump’s diplomacy toward North Korea will become an important spotlight of international politics and conflict resolution.

Sonny Shiu-Hing Lo is a political scientist, veteran commentator, and author of numerous books and academic articles on Hong Kong, Macau, and Greater China. He is also an honorary professor in the Department of Politics and Public Administration at the University of Hong Kong.