Could Iran and the U.S. reach a new nuclear trade deal anytime soon?
The United States and Iran have had no diplomatic relations since the Iranian Revolution of 1979, but prior to that, they were staunch allies and enjoyed good economic ties. The U.S. mainly imported oil from Iran (and pistachios), while Iran imported many goods, such as medical equipment, services, and machinery. As the revolution halted trading between the two countries, trade slowly began to pick up around a decade later. Yet, the continuous imposition of trade sanctions on Iran due to their support of various Middle Eastern terrorist groups and their alarming nuclear strategy further complicated this.
In July 2015, Iran and the U.S. signed a nuclear agreement known as the Joint Comprehensive Plan of Action (JCPOA). This deal stated that Iran must disassemble a bulk of its nuclear program and open its facilities for additional thorough international inspections. In return, Iran would receive billions of dollars for sanctions relief. This agreement was made solely to reduce the likelihood of severe global conflict. Yet, in 2018, President Trump made the decision to withdraw the United States from the deal. Tensions flared following Trump’s re-negotiation of the agreement. Fortunately, President Biden has since assisted in mending the relationship between the two countries; however, it is still far from ideal.
Although the U.S. sanctions on Iran have significantly affected trade, both countries have still found ways to bypass the trade barrier. According to the United States Census Bureau, in 2023, the U.S. exported $30.6 million of goods to Iran while importing $600,000. Although numbers for both countries have severely decreased, it is still surprising that there is a sliver of trade between them.
During the last 26 years, the exports from the United States to Iran have decreased at an annualized rate of 7.18%, while the exports of Iran to the United States have increased at an annualized rate of 8.3% over the last 26 years. Below is a look at how U.S. trade has steadily decreased from 2004 to 2018.
The U.S.-Iran trade relationship has continued to be heavily strained due to Trump pulling out of the nuclear deal, as well as major sanctions imposed by the U.S. Despite Trump’s 2018 sanctions, which aimed to restrict oil exports, Iran has slowly begun exporting oil again. This is a key measure needed to once again improve the meager trade numbers between Iran and the U.S.
It is certainly unlikely that a new nuclear deal could be reached any time soon. The relationship between both nations is still highly flawed, but President Biden is actively exploring ways to rebuild the relationship. Using Qatar as a mediator, the U.S. and Iran were recently able to successfully swap five U.S. prisoners in Iran with 5 Iranian prisoners in the U.S. while unfreezing $6 billion of Teheran’s funds. Although this rare deal does not resolve the existing issues between the two, it is undoubtedly a positive step.
For this long-lasting conflict to be resolved, the U.S. will need to rebuild trust with Iran, and lift many of its sanctions. Obviously, it is not as brief and simple as that, but doing so will promote more trade, ultimately boosting both nations’ economies and allowing the U.S. and Iranian officials to eventually negotiate a new deal.
