Trump's Iran deal exit raises regime change specter

Glen Norman
May 13, 2018

A similar commentary from insurer North P&I Club added: "The decision by President Trump announced on 8 May to cease the United States participation in the JCPOA and to begin re-imposing USA nuclear-related sanctions is likely to have significant ramifications for maritime trade with Iran and the insurance of such trade".

Planemakers Airbus and Boeing, oil companies and vehicle manufacturers such as France's Renault and Peugeot could be among companies hardest hit.

The U.S. will also reimpose sanctions on specific persons who were targeted for their involvement in Iran's nuclear program, relieved of sanctions since January 16, 2016, when the nuclear deal was implemented.

Market participants said there were still many unanswered questions about how the United States might impact European companies.

"It is not yet clear which concrete sanctions the US will impose".

European governments tried for months to persuade Mr Trump to stick with the deal but failed, and now fear it will raise the risk of conflict in the region. The reaction from some in Europe was bitter.

French Finance Minister Bruno Le Maire said Friday on Europe-1 radio that Europe should not accept that the the "world's economic policeman". Jean-Claude Juncker, the president of the European Union's executive body, said the U.S.

As Iranians take to the streets to protest President Donald Trump-who ditched the Iran nuclear deal this week despite warnings that it could lead to "a potentially catastrophic military confrontation"-in a speech on Friday, Europe's top diplomat vowed to work with the worldwide community to save the agreement and railed against Trump's style of politics". As a effect, companies worldwide must stop doing business with Iran or risk USA fines or other punishment.

France pledged on Friday to push back against the threat of USA sanctions against French companies doing business with Iran, in the wake of Washington's withdrawal from the global nuclear agreement with Tehran. These bills targeted foreign businesses outside the jurisdiction of the USA - including some of the biggest companies of America's closest allies in Europe - by threatening to cut them off from the US financial and banking systems if they invest in Iran.

Shares in Renault, PSA and Airbus all fell on Wednesday.

If all had gone as planned, and Hillary Clinton had won the election, then Iran might have seen more foreign investment - the real payoff of the deal, beyond the billions in cash up front that Obama provided.

The Iranian deals represented a blip in Boeing's business. "There is no one who will realistically choose Iran over the U.S.", said energy consultancy FGE.

- President Trump chose a dicey time to crack down on Iran, the world's fifth-biggest oil producer.

With regard to oil prices and fundamentals, most analysts agree that the gravity of the effect US sanctions against Iran will have is questionable. There will be a 180-day period for countries to wrap up existing contracts and achieve "significant reductions" in their purchases of Iranian crude, although Mnuchin did not spell out what the administration meant by the term.

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