Iran deal: Who loses as United States sanctions return

Eileen GuzmanMay 10, 2018

Following President Donald Trump's scrapping of the Iran nuclear deal Tuesday and his imposition of what he called "powerful" sanctions, Boeing's prospective sale to Iran of jets worth $9.5 billion is effectively dead for the foreseeable future. Despite being a foreign company, Airbus is also at risk of losing revenue as a result of Trump's decision because its planes are composed of more than 10% of American-made parts, meaning it must receive permission from the U.S. Treasury Department to sell products to Iran.

European airplane maker Airbus was among the early beneficiaries and seized the opportunity to strike a 22.8 billion euros (US$25 billion) deal for 118 new aircraft to Iran in late January 2016, along with involvement in other operational and support activities locally.

Peugeot-manufacturer PSA PEUP.PA , one of the big European businesses with operations in the country, said it hoped the European Union would adopt a common position on Iran.

However, the analysts expect that the impact on Boeing would be a modest one because of a backlog of orders for 737 aircraft, the stock of Boeing slided down by 0.6 percent and had closed at $338.37 per share.

New sanctions on Iranian oil exports would put a dent in global supply and could cause prices to spike.

Carl Bildt, the former prime minister of Sweden who is now co-chair of the European Council on Foreign Relations, complained that new sanctions "are hardly hitting any USA companies, but aim primarily at European ones".

By contrast, Boeing Chief Executive Dennis Muilenburg signalled last month that his company was no longer as dependent on the Iran orders as it had been, following an aggressive effort to improve sales of its current-generation 777-300ER wide-body jets which were part of the Iran deal.

And in 2017, Germany's Volkswagen announced that it will sell cars in Iran for the first time in 17 years.

Airbus said it will "carefully analyze" the implications of the USA withdrawal from the nuclear deal with the Islamic Republic before deciding how to proceed.

"That's something we'll consider on a case-by-case basis, but as an overview, I would say that the goal is to broadly enforce the sanctions", he said, adding the administration's objective was to deny Iran access to the USA financial system.

Meanwhile, Boeing said the company would consult with the government on next steps.

"We will consult with the USA government on next steps". A Chinese oil company also has a deal to develop the country's massive South Pars offshore natural gas field. At the conclusion of the wind-down periods, the applicable sanctions will come back into full effect.

Valiollah Seif, the governor of Iran's central bank, says the country has enough foreign currency on hand to fund purchases of basic commodities and raw materials.

"Higher fuel prices could mean more buying power for Middle Eastern customers", he said.

Mnuchin said it may be possible for some companies over the next three months to seek waivers from the sanctions or new licenses to do business with Iran, but he did not identify which companies. It's also possible that nixing the deal pushes up oil prices, padding coffers in countries like Saudi Arabia, Qatar and Kuwait. PSA Peugeot Citroen, for example, sold more than 3.6 million vehicles worldwide a year ago.

Related Articles:

« Previous article
Next article »

Popular Pages

Jump Into Fortnite With Twitch Prime Pack #2
Like any previous Twitch Prime loot pack , you'll need to make sure you have an active subscription to be able to claim the loot. This means all you have to do is link your Twitch account to your Amazon account and you'll have a Twitch Prime membership.

Intu Properties (LON:INTU) Given Reduce Rating at Peel Hunt
Five research analysts have rated the stock with a hold rating and eleven have assigned a buy rating to the company's stock. The shares were sold at an average price of GBX 209 ($2.84), for a total transaction of £46,076.14 ($62,501.55).

Scientists find a potential cure for baldness
The scientists discovered that the drug reduces the expression of a protein that blocks the growth of hair follicles. Half of British men can expect to lose their hair by the time they turn 50, with hair loss largely in their genes.

Damascus-Area Air Strike Targeted Missiles Trained on Israel
Netanyahu made his statements as the two leaders discussed bilateral relations, as well as the situation in the Middle East. Haaretz reported that the Israeli army said it believes Iran is planning to carry out an imminent strike from Syria.

Paul Casey withdraws from Players Championship with injury
As part of a major shift on the PGA Tour schedule for the 2018-19 season, the PGA Championship will move from August to May. Rose can only jump to number one with a win, while Rahm and Spieth need at least a solo second place finish.

DeMar DeRozan: Maybe Cleveland Just Has Our Number
In four games against the Raptors, LeBron averaged 34 points, 8.3 rebounds and 11.3 assists on 55 percent shooting from the field. But we had a great gameplan and we executed it. "From Game 1, they were wonderful", James said of his teammates.

Golden State Warriors and Houston Rockets book place in Western Conference finals
The Jazz's star rookie Donovan Mitchell , with 24 points for the game, sparked a 21-6 third quarter run against the Rockets. Paul's game-winning display left the 33-year-old contemplating his first appearance in a Western Conference finals.

Republicans hope to hold off Democratic resurgence in Tuesday's in primaries
Messer is against legalization of the "biggest gateway drug that's frankly known" at a time when IN is facing an opioid crisis. At the same time, he highlighted his record of bipartisanship and noted that he often votes in line with the president.

Kim Kardashian Shows Off Unreal Curves In Met Gala Versace Gown
Clooney arrived early in a striking silver corseted top, navy slacks and a cascading metallic, rose-patterned skirt. This year's co-chairs also included Vogue's Anna Wintour , Amal Clooney and Donatella Versace .

Barcelona player ratings: Who impressed against Real Madrid in El Clasico?
Instead the staff from the Nou Camp applauded the players off of the pitch after the 2-2 draw with Gerard Pique explaining all. There's a confidence from Zidane that Ronaldo will be fully fit for the Champions League final against Liverpool .