After economic sanctions were lifted off of Iran, many countries quickly began trade talks and one of the first countries to jump on this was Germany. Large German companies, such as Siemens AG, have already announced plans for large industrial projects in Iran. German companies hoped that the removal of the embargo on Iran would reignite old trade deals that had reached $5bn in yearly exports. Although exports have jumped since January, the results have left Germans disappointed.
Since 2005, sanctions have been put on Iran when it started to intensify its nuclear activities. All negotiations for a Trade and Cooperation Agreement (TCA) between EU and Iran were put on hold. In 2016, the United States lifted some, but not all sanctions against Iran. The US only removed “secondary sanctions”, and that means that Iran can now do business but it must be entirely outside of US jurisdiction with non-US persons and companies. The US still designates Iran a State Sponsor of Terrorism, which blocks loans to the country by international banks with ties to the US. Without international banks, financing trade deals and processing transactions is very difficult. This stops Iran’s access to global markets and is preventing German exports to grow properly.
Germany has been recording a trade surplus for the past 64 years, but experts believe that this streak will not continue for long, as China’s demand is falling and other countries that are importing from Germany are also expected to demand less over the next couple of years. Therefore, in order to maintain high exports, Germany wants to increase its exports to Iran to offset the expected fall in exports in the near future. German experts believed that within the next couple of years, its yearly exports to Iran will rise back to $5bn and double in the long run to $10bn. However, in the first six months of this year, German exports to Iran climbed only 15%, to €1.13 billion ($1.26 billion). In this current situation, Germany has been left disappointed and some lay blame on the US for the shortfall of exports.