Trump's Trade Conundrum With Iran - Global Trade Magazine
  October 16th, 2017 | Written by

Trump’s Trade Conundrum With Iran

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  • Boeing's export license to sell aircraft to Iran still stands.
  • The Trump administration has been silent on Boeing's deal to export aircraft to Iran.
  • If Trump allows license for Boeing sales to Iran to stand it would “blow a hole in the administration’s position.”

From an international trade perspective, one issue looms largest in the face of President Donald Trump’s decertification of the Iran nuclear deal last week.

Last year, Boeing completed a deal with Iran Air for the sale of 100 777 and 737 aircraft, a transaction worth in the neighborhood of $25 billion. The transaction that would not have been possible prior to the easing of trade sanctions with Iran, approved after the Joint Comprehensive Plan of Action (JCPOA), the controversial nuclear deal, was ratified by Congress. Boeing was granted a license for that sale by former President Barrack Obama’s Treasury Department.

The Obama administration said the airplane sale would create goodwill in Iran by helping to modernize the country’s airline sector. But skeptics note that Iran Air is still flying arms to President Bashar al-Assad of Syria, who is fighting a civil war, on behalf of the Islamic Revolutionary Guard Corps.

Although a bipartisan cadre of congressional members have attempted to scuttle to Boeing deal, the license still stands.

Trump’s statement on Friday refused to reiterate that the JCPOA was in the security interests of the United States—a statement he has made twice before in his presidency, a congressional requirement to be repeated every 90 days—but it stopped short of pulling the US out of the deal. The administration has also been silent on the Boeing deal, an issue which could prove thorny for the president.

“The question of what the president is going to do with the Boeing deal… remains unclear,” said Reuel Marc Gerecht, a senior fellow at the Foundation for Defense of Democracies, at a program held last week at the Atlantic Council. “I think one has to assume that if they remain unclear much longer, then the likelihood is that the president will allow President Obama’s license to stand for those sales, which, of course, if nothing else, philosophically, blows a bit of hole in the administration’s position, since there is no one in the administration who believes those planes are going to just be used for commercial travel.”

On the other hand, if Trump blows up the Boeing deal, he will be sacrificing $25 billion in US exports and the jobs that go along with it. As Gerecht suggests, Trump may simply avoid the issue, allowing the deal to go through, hopefully without much attention being paid to it.

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