U.S.-Iran Interim Deal Sparks Debate Over Asset Use and Implications for American Farmers

WASHINGTON (AP) — President Donald Trump and Vice President JD Vance claim that their interim agreement to end the conflict with Iran will benefit American farmers financially. However, this assertion faces skepticism from Iranian officials and experts on sanctions, who question how billions of dollars of Iranian assets, frozen by U.S. sanctions, would reach America’s agricultural sector from locked escrow accounts.

The tentative agreement, reached recently, proposes the reopening of the Strait of Hormuz. This crucial passageway had facilitated the transit of a fifth of the world’s oil and gas reserves. Iran would be allowed to sell its oil freely for 60 days, while the United States and Iran negotiate further issues. The agreement also includes promises to unfreeze Iranian assets.

Despite these developments, Trump’s agreement faces criticism for not addressing the primary reasons behind the U.S.’s initiation of war with Iran on February 28. Concerns include Tehran’s nuclear ambitions, its missile program, and support for militant organizations such as Hezbollah and Hamas.

On Tuesday, Trump took to his Truth Social media platform to respond to critics. He asserted that U.S. farmers could anticipate financial benefits. Trump detailed that the U.S. Treasury Department would release Iranian assets, controlling the funds within U.S. escrow. This money would then be used to purchase food and medical supplies exclusively from the United States, namely corn, wheat, and soybeans that are needed by Iran.

Vice President Vance, after high-level talks in Switzerland, indicated that frozen funds held outside Iran would be utilized to purchase U.S. agricultural products. However, Iran has denied that this forms part of the agreement. Esmail Baghaei, a spokesperson for the Iranian Foreign Ministry, stated that any agricultural purchases would depend on competitive pricing and quality standards, not on terms dictated by the U.S.

Baghaei commented on the irony in the situation, where the initial goal of the war to dismantle Iranian civilization has shifted towards enriching American farmers. Iran’s ambassador in Geneva, Ali Bahreini, refuted Vance’s suggestion that the U.S. and Qatar would have authority over Iran’s asset allocation, emphasizing Iran’s sovereignty over its financial resources.

In response, a U.S. official dismissed contradictions, suggesting Iranian leaders target their domestic audience. The official chose to remain anonymous due to restrictions on speaking on record.

Joseph Glauber, a research fellow emeritus at the International Food Policy Research Institute, expressed skepticism that Iran would sever trade ties with existing food partners. Iran’s major suppliers include Brazil, India, Turkey, the European Union, Canada, Australia, and Argentina, suggesting that adopting U.S.-centric demands might strain relations with these countries.

Historically, U.S. sanctions have required foreign countries with Iranian imports, such as oil purchases by South Korea and Iraqi purchases of electricity, to retain the payments in escrow to ensure they are directed towards non-sanctionable items like food and medicine. Recently, the U.S. Treasury approved sales of Iranian oil and petrochemical products through August 21, without mention of escrow requirements.

Richard Goldberg of the Foundation for Defense of Democracies noted his desire for a definitive restriction limiting Iran to purchasing American agricultural goods. Richard Nephew from Columbia University’s Center on Global Energy Policy expressed uncertainty about the asset release terms in the new U.S.-Iran deal.

Nephew, versed in sanctions design under the Obama and Biden administrations, posited that the U.S. might attempt to channel funds towards American farm products through foreign bank directives. Yet, compliance is not guaranteed, and noncompliance could lead to further sanctions. He also highlighted the rarity of such tactics, reflecting broader national security concerns rather than perceived economic opportunism.

Contributions to this report came from Associated Press writers Josh Boak and Michelle L. Price in Washington.