How Will Europe React to Trump’s Dumping the Iran Deal?

Photo by European People’s Party | CC BY 2.0

People are asking how Iran will respond to Trump’s announcement about U.S.withdrawal from the Joint Comprehensive Plan of Action signed by Iran, the U.S., UK, France, Germany, China and Russia in July 2015. I wonder how Germany, the world’s fourth largest economy, will react. Last month in her summit with Trump, Angela Merkel reiterated German strong support for the agreement. I wonder how France will respond. Emmanuel Macron, who also had a summit with Trump last month, reiterated French ongoing support. I wonder how Britain will respond. Theresa May has called the agreement “vital” and British foreign minister Boris Johnson is in Washington urging continuation of the deal.

Germany and France are among Iran’s top ten trade partners (despite the sanctions). They want to expand trade with and investment in the world’s 27th largest economy. With a huge territory, well-educated population of 80 million, rich natural resources and receptiveness to foreign capital, Iran looks like an attractive investment opportunity.

Germany comprises 60% of EU investment in Iran. It sells machinery, metals, chemicals and vehicles, and agricultural products and has a substantial trade surplus with the country. Its investments have been increasing by about 25% annually in recent years. German capitalists have been looking forward to this day. In January the Iranian Khodro auto manufacturer signed an agreement with Daimler to produce…

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