Companies with deep ties to infrastructure such as Boeing and General Electric stand to lose billions as a result of President Donald Trump’s decision to withdraw from the Iran nuclear pact, thus restoring stringent sanctions which had been imposed previously.
US Exit from Iran Nuclear Pact
- President Donald Trump this week said the US will withdraw from the 2015 Iran nuclear deal and impose the “highest level” of sanctions on the country.
- Leaders of the UK, France and Germany, also signatories to the agreement, issued a statement saying they remained committed to the accord.
- Iranian President Hassan Rouhani suggested his country would continue to abide by the deal.
- Among the companies hit by the decision are Boeing and General Electric since stricter sanctions mean the loss of export licenses.
Chicago-based Boeing had received US Treasury licenses to begin conducting business in Iran after sanctions were lifted in the 2015 pact, albeit under strict oversight.
In December 2016, Boeing had announced an agreement to sell Iran Air 80 aircraft valued at $16.6 billion. It also announced a contract in April 2017 to sell Iran Aseman Airlines 30 Boeing 737 MAX aircraft for $3 billion, with purchase rights for another 30 aircraft. he Iran contracts would support tens of thousands of jobs, it had said.
However, the aerospace company said it would abide by the US decision to cancel its $20 billion worth of licenses to sell the aircrafts to Iran – with CEO Dennis A. Muilenburg downplaying any impact, saying Boeing never began building the planes or factored them in as future revenue.
“Under the original deal, there were waivers for commercial aircrafts, parts and services, and the existing licenses will be revoked,” US Treasury Secretary Steven Mnuchin has said.
“The licenses are coming down,” Secretary Mnuchin said. “The objective is to put and maintain maximum sanctions on Iran; that is the objective here.”
Boeing’s European rival Airbus also had announced contracts with two other carriers, Iran Air Tour and Zagros Airlines, for 100 planes in all. With industrial capacity in the US, Airbus is subject to US policy and will licenses to sell as well.
Boston-based General Electric has affiliates outside the US which received contracts since 2017 totaling tens of millions of dollars for equipment for gas production projects and gas and petrochemical plants, according to a May 1 securities filing.
The Trump administration has given companies 90 to 180 days to wind down existing contracts.
A host of European companies apart from Airbus also could be impacted. For example, French oil giant Total is at risk of losing a contract to help develop Iran’s South Pars gas field. Total has warned that its position in the project depends on the state of the broader nuclear agreement.
Similarly, French automaker PSA Peugeot Citroen had reached an agreement last year to sell cars in Iran and has reported sales increases in the country since resuming. PSA has indicated interest in returning to the US market, a goal that would force it to rethink its Iran plans.
Wire reports contributed to this article.