President Donald Trump’s long-anticipated decision to pull the U.S. out of the Iran nuclear deal and reimpose sanctions on the Islamic Republic will have a swift effect on some big companies.
The U.S. administration is giving affected companies either 90 days or 180 days to wind down their interactions with Tehran before sanctions kick in again.
However, the sanctions for now only affect companies that operate out of the U.S. or have significant exposure there. The big question now is how the U.S. will treat its allies, which want to maintain the deal despite the U.S.’s withdrawal: Will it take measures against their companies if they continue to do business with Iran?
Here are six of the firms that will be hit—or not, depending on the details that are still to come.
Boeing and Airbus
Plane-makers Boeing and Airbus are probably the highest-profile casualties of the reimposed sanctions, as they had been planning to start selling aircraft to the Islamic Republic for the first time.
Boeing (BA) is of course based in Chicago, but France-based Airbus (EADSY) also needed its now-revoked U.S. export license because more than 10% of its parts are American.
Only Airbus has already delivered any aircraft to Iran—three of the 100 ordered by Iran Air, at a list price of around $19 billion. Boeing has a big backlog on orders anyway, so it never got round to making its planes for Iran Air (80 aircraft for $17 billion) or Aseman Airlines (30 for $3 billion).
General Electric and Total
GE (GE) is hit pretty hard here. Not only is it one of the U.S. companies making parts for Airbus, but it has also received big parts orders for oil and gas facilities in Iran.
The company said it will “adapt [its] activities as necessary to conform with these changes in U.S. law.”
Speaking of energy, France’s Total (TOT) has a $2 billion deal with China’s CNPC to develop Iran’s South Pars gas field. It’s already spent $90 million to develop the field, and Iran’s state oil company says it won’t be compensated until production begins. The National Iranian Oil Company also said that Total would lose its stake in the field to CNPC if it withdraws from Iran.
On the plus side, oil prices have risen as a no-brainer consequence of Trump’s withdrawal from the Joint Comprehensive Plan of Action—so Total’s shares are up too.
Volkswagen and PSA Group
Volkswagen (VLKAY) had been reticent about entering the Iranian market, due to its exposure to the U.S. market, but last year it started selling cars in the Islamic Republic again. That may have to change now.
Meanwhile, France’s PSA Group (PUGOY)—the company that makes Peugeots and Citroens—has also been keenly selling into Iran. It even touted its lack of exposure to the U.S. market as an advantage over its German rivals, and sales in Iran helped to offset PSA’s difficulties in territories such as China and the U.K.
Now that the U.S. sanctions are back, PSA says it is hoping for the EU to adopt a common position on Iran. So far, France, Germany and the U.K. have all said they want to stay in the Iran deal.
If PSA wants to start selling Peugeots in the U.S. again, as it has indicated, it may have to pull out of Iran anyway.