Trump announced yesterday afternoon that he would violate and withdraw from the Iran nuclear deal by reimposing all economic sanctions that were lifted as part of the deal, but what does that really mean?
It means the Iranian market will be effectively closed off to American businesses and all business deals signed after the peace treaty was adopted by the Obama administration will be canceled.
We should expect to see many economic causalities of Trump's decision in the coming months, but several high profile companies are already seeing immediate implications and loses. Boeing, for example, will lose at least $20 billion in orders as a result of Trump's decision.
Boeing has agreements to sell 110 planes worth roughly $20 billion to Iranian airlines, based on list prices. The U.S. withdrawal, which pledges punishment for banks and businesses doing transactions in Iran, stretches to Boeing’s French rival Airbus, which had a multibillion-dollar sale planned, and to parts maker General Electric Co.
Licenses for Boeing BA and Airbus to sell passenger jets to Iran will be revoked, U.S. Treasury Secretary Steven Mnuchin said after President Trump made his announcement to pull the U.S. out of what he considers a “defective” Iranian nuclear deal, defying allies and despite warnings that it could ratchet up tensions in the volatile region.
I'm not going to shed a tear for corporate entities and their profits, but losing orders of this size will almost certainly translate to thousands of layoffs at Boeing and General Electric.
And you know who will take their place? Rival manufacturers from other countries from Russia and China to possibly the European Union if they decide to completely break away and ignore Trump's sanctions.
Someone is going to build Iran's planes and stock their shelves, it just won't be us.
We'll finally be Great Again.