The United States says it plans to channel billions of dollars in unfrozen Iranian assets into purchases of American agricultural goods as part of negotiations aimed at securing a broader agreement to end the conflict in the Middle East, potentially opening a limited new chapter in economic ties between the long-time adversaries, says Al Jazeera.
Under the proposal outlined by President Donald Trump’s administration, Iran would use released funds to buy food and medical supplies, including corn, wheat and soybeans, from US suppliers.
Iranian officials, however, insist they alone will determine how the money is spent, highlighting continuing divisions even as negotiations move forward.
The dispute centres on about $12 billion in frozen Iranian assets. Following the first round of talks in Switzerland on Monday, after last week’s signing of a US-Iran memorandum of understanding, Iran’s chief negotiator, Mohammed Bagher Ghalibaf, said an agreement had been reached to release the funds.
US Vice President JD Vance offered a different interpretation, saying any released assets would finance purchases from American farmers. Trump echoed that position, saying the talks were progressing well and that Iran would buy products such as corn and soybeans from the United States.
In a Truth Social post the following day, Trump said any money or sanctions relief authorised by the US Treasury would be placed in a US-controlled escrow account and used exclusively to purchase American food and medical supplies for Iran. Describing the situation as a humanitarian crisis, he said assistance was needed before it was too late.
Tehran has not confirmed such an arrangement. Foreign Ministry spokesman Esmaeil Baghaei said Iran would have complete freedom to use the released assets to purchase whatever goods the country required.
He said any agricultural imports would depend on price and quality rather than conditions imposed by Washington, adding that it was ironic the stated goal of the conflict had shifted from destroying Iranian civilisation to enriching American farmers.
Iran’s ambassador in Geneva, Ali Bahreini, also rejected the US position, saying only Iran would decide how the assets were used. Economists and trade specialists say translating the proposal into reality will be difficult.
Gary Hufbauer, a non-resident senior fellow at the Peterson Institute for International Economics, said attempts to attach spending conditions to unfrozen assets would trigger lengthy negotiations.
He added that many members of the US Congress oppose any agreement with Iran, while multinational companies would remain cautious because of political uncertainty and commercial risks.
Mohammad Reza Farzanegan, an economist at Germany’s Philipps-Universitat Marburg, said Trump had strong political incentives to direct Iranian spending towards American agriculture.
US soybean exporters, he noted, have suffered during Washington’s trade dispute with China, making the proposal attractive to the president’s domestic support base while presenting sanctions relief as humanitarian assistance.
Cullen Hendrix, also of the Peterson Institute, said the proposal could help Washington avoid the appearance of transferring funds directly to Tehran, which might be viewed domestically as a concession.
Despite decades of sanctions, the two countries still conduct limited trade focused mainly on humanitarian goods exempt from sanctions, including medicines, medical equipment and agricultural products.
According to US government figures, bilateral goods and services trade reached $838 million in 2024, up three percent from 2023. Services accounted for $742 million, nearly $600 million of which flowed from the United States to Iran. Almost all physical goods traded consisted of American exports to Iran.
Analysts believe a broad commercial relationship remains unlikely because neither government appears willing to promote such an arrangement domestically.
Hendrix said Iran might buy more US corn and soybeans but would avoid becoming structurally dependent on American food supplies, especially while the risk of renewed conflict remains.
Farzanegan said realistic opportunities would largely be confined to food, agricultural commodities, medicines, medical devices and related health products.
He noted the UN Food and Agriculture Organization expects Iran to import about 22 million tonnes of cereals this year, representing a multi-billion-dollar market. Hufbauer said Iran could also export crude and refined petroleum products competitively to the United States.
Before the 1979 Islamic Revolution, Iran was among Washington’s closest Middle Eastern allies. Trade flourished after the US-backed restoration of Shah Mohammad Reza Pahlavi in 1953, with Iranian oil flowing to America while US companies supplied aircraft, military equipment, industrial machinery, automobiles, agricultural products and technology.
Relations collapsed after Ayatollah Ruhollah Khomeini overthrew the Shah and the 444-day US embassy hostage crisis prompted President Jimmy Carter to freeze Iranian assets and ban imports.
President Bill Clinton imposed a comprehensive trade embargo in 1995. Sanctions eased under the 2015 nuclear agreement but Trump withdrew the United States from the accord during his first term in 2018.
