Before President Trump took over office, Boeing’s $8bn deal to sell Iran Air 80 jets was already facing hindrances. The deal is now in much bigger turmoil.
And the troubles may directly impact the American factory workers whose livelihood depends on Boeing’s success.
For a long time, Trump has repeatedly criticized Iran nuclear deal that Mr. Obama signed permitting Boeing to sell the jets to Iran, reports BBC.
After being sworn in, Donald Trump signed executive orders that ban immigrants from 7-Muslim dominated countries from setting foot into the United States. The order further puts to halt all US-related refugee programs. Iran is included in the list of banned countries. After Iran performed a missile test, the President quickly issued a set of warnings to Tehran.
Every bit of sanction that Donald Trump makes is a bullet leading to the death of the Boeing deal. Even though the sanctions will not specifically kill the deal, they will make it even much harder for the deal to sail through. And what if Iran decided to retaliate by canceling the deal?
Iran-US Relations and the EU
Already we have in picture a deal of equal strength struck between Iran and Airbus to sell 100 jets for $10bn to Tehran. Airbus is Boeing’s top European rival and its plans may also likely to be in jeopardy. Airbus is made mainly using American parts and thus requires an approval from the U.S.
According to an aviation analyst, Richard Aboulafia, Trump’s comments on Iran will not end well with both jetliners.
Boeing has chosen to remain silent on its outlook as far as the deal is concerned.
In a statement to news agencies on Friday, Boeing said that its operations are based on the current license adding that if the Treasury Department guided them otherwise, they would respond appropriately.
What Donald Trump fails to understand is that strongly standing against Iran will be disastrous to the U.S. economy, particularly the manufacturing sector. The most directly affected employees are from Boeing, jet engine makers GE and United Technologies. During the announcement of the Iran deal, Boeing said that 100,000 new jobs would be created both in the company and its U.S. suppliers.
At the moment, Boeing has lots of orders and thus failure of the deal would not result in loss of 100,000 jobs. However, the Airliner has in recent times instigated several lay-offs.
Yet again, American relationship with European countries could be in danger if the President nixes the Airbus deal. According to Adam Pilarski, vice president with industry consulting firm Avitas, such an action would get the EU members angered. Such anger would translate to Europe reducing its reliance on American parts.