Boeing To Supply Iran With Aircraft Setting Up A Potential Clash With Trump

Boeing announced that it has inked a deal worth $3 billion with an Iranian airline to deliver 30 units of the 737 Max jet. This is the first big deal by a United States firm to Iran since President Donald Trump took over. The new deal with Iran Airlines is separate from another $16.6 billion agreement which Boeing is yet to finalize. Once completed, this will constitute the first jet sale to Iran by the United States since the 1970s.

While Trump has not said anything so far concerning the deal, conflict is likely to arise since he has vowed to be tough on Iran but he has also at the same time promised to boost manufacturing jobs in the United States. In a statement that was released on Tuesday, Boeing did not fail to tout the potential job-creation effect of the deal.

“[The Iran deal] creates or sustains approximately 18,000 jobs in the United States,” read part of the statement from Boeing.

Turbulence ahead

Before the deal can be finalized, the U.S. Treasury Department must first sign off on it. The deal was made possible by the fact that the Obama administration lifted sanctions on Iran in return for the Islamic Republic to make concessions on its nuclear program. Trump had widely condemned the lifting of the sanctions and even threatened to re-impose them while he was on the campaign trail.

If the deal is approved, deliveries to Iran could start in two years according to Boeing. This would assist Iran Airlines in modernizing its fleet and enable it fly once again to places it has been banned. This includes the European where, following a couple of crashes, a blacklist of carriers has been in place since 2006.

A win for Airbus

But should the Trump administration block the deal, it will be to the advantage of Airbus, the European aircraft manufacturer. Airbus has already secured an order worth $25 billion from the Iranians. Blocking the deal also come at a bad time for Boeing since sales of commercial airplanes is slowing. At the moment, Boeing is undertaking cost-cutting measures and engineers working in South Carolina, California and Washington are being laid off.

The frosty relations between Tehran and Washington further came to the fore recently when Iran imposed sanctions on 15 U.S. firms operating in Iran. This included Raytheon, a defense contracting company. The action was taken in retaliation for sanctions that had been imposed on Iran earlier by the U.S.

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