US set to allocate $300 billion to Iran
The US and Iran are anticipated to formalise a 14-point memorandum of understanding in two days, with the objective of concluding the conflict that has persisted for over three months in West Asia. This agreement will initiate a 60-day negotiation process aimed at achieving a durable resolution and establishing stringent new restrictions on Iran’s nuclear program. According to the memorandum, the US, in collaboration with its regional partners, is set to allocate a minimum of $300 billion in reconstruction funds to Iran “for the rehabilitation and economic development” of the country following the war that resulted in significant loss of life and severely impacted Tehran’s economy. If the agreement proceeds as outlined in the draft document, it will signify a significant reversal in President Donald Trump’s longstanding position on US policy regarding financing Iran. For years, Trump has criticised the former US president Barack Obama’s administration’s 2015 nuclear agreement, denouncing the sanctions relief package that effectively unlocked an estimated $150 billion for Tehran. In 2017, Trump stated on X, “Iran was on its last legs and ready to collapse until the U.S. came along and gave it a lifeline in the form of the Iran Deal: $150 billion.” Iran was nearing collapse when the U.S. intervened, providing a lifeline through the Iran Deal, which amounted to $150 billion.
However, critics have highlighted that Trump’s agreement bears resemblance to the Joint Comprehensive Plan of Action, the significant nuclear accord established in 2015 between Iran and six global powers during the Obama administration. However, Trump has dismissed those comparisons. Writing on his social media platform, Truth Social, he characterised the proposed agreement as the “complete opposite” of Obama’s deal. He also noted that the US would not contribute to the reported $300 billion reconstruction fund. The US-Iran deal draft memorandum, which is expected to be signed in Switzerland on June 19, states: “The United States undertakes, together with its regional partners, to create a comprehensive plan agreed upon by both parties for the rehabilitation and economic development of the Islamic Republic of Iran, while ensuring financing of at least $300 billion. The implementation mechanism of this plan, as part of the final agreement, will be formulated within 60 days.”
The Iran nuclear deal, signed in July 2015 between Iran and several world powers, including the US, aimed to dismantle a significant portion of Tehran’s nuclear programme while allowing for more comprehensive international inspections of its facilities, in return for billions of dollars in sanctions relief. The current agreement, which remains unsigned, fundamentally resembles previous iterations: it seeks to limit Iran’s nuclear endeavours in exchange for economic benefits. However, the draft memorandum extends its scope by associating nuclear negotiations with a broader regional peace framework. This includes the cessation of hostilities, the reopening of the Strait of Hormuz, the removal of US sanctions, and a suggested $300 billion reconstruction and economic development initiative for Iran.
While Trump has refuted the parallels between the deal and the JCPOA, Obama has asserted that the draft agreement fundamentally mirrors the terms of his own arrangement. “It is doubtful that any agreement that arises is going to be significantly different, or a significant improvement from the deal that we had in the first place, and had worked for a long stretch of time before we, the United States, pulled out of it,” Obama said in an interview due to be aired on Wednesday. However, US Vice President J D Vance has reaffirmed Trump’s position. In an interview, he remarked, “If you go back to the Obama JCPOA, what it did was it took an Iranian nuclear programme that it accelerated. It basically bribed the Iranians to stop that programme.” He added, “The Iranian nuclear programme has been completely destroyed (now), and what we’re saying is: make the long-term commitment to not rebuild it, and you will get the benefits that come with that.”
