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CCTV Script 14/05/18


— This is the script of CNBC's news report for China's CCTV on May 14, 2018, Monday.

The latest statement from US officials confirmed the threat from Trump: US may sanction the companies working with Iran, if the European countries continue to abide by the agreement after US announced to withdraw that. At the same time, Mike Pompeo, Trump's secretary of state, holds a mild position, saying he still believes that the US and its allies may reach a new agreement with Tehran in CBC's interview.

[POMPEO] "we will continue to work. President Trump, and President Macron have both said, we want to get a deal that's right.ááA bigger deal. We will be hard at that in the weeks ahead. I hope to be a central part of achieving that. It would be a wonderful thing if we could get the Europeans to do this."

The position from Bolton and Pompeo causing the markets re-estimate the chain-reacting or butterfly effect to European companies, if US's requirements can be fulfilled. The trade between Europe and Iran boosted since the nuclear agreement took effect.

In 2016, Iran's exports to the EU increased 339.8% and that was up 83.9% in 2017. Meanwhile, European companies' export to Iran also rose significantly.

Many European companies have invested a lot in Iran, for example, there are more than 300 French companies do investments in Iran from Jan, 2016.

From the view of US, if other countries that in the nuclear agreement still obey the agreement, then the US has difficulty to press Iran alone. So US is considering the "Secondary sanction" that is sanction European companies. The U.S. side stated that for European companies doing business in Iran, Washington will give them six-month to end the business. However, for EU, the coordination and negotiation are still at beginning stage. And the European officials and representatives also warned the US doesn't take unfair measures to hinder trade between EU companies and Iran. EU has to think how to protect their own companies; this may include anti-sanction measures against the United States.

German Economy Minister Peter Altmaier said that Germany government is set to help its companies and minimize the consequences of US sanction. The unstable situation in Iran will not only cause crude oil prices to fluctuate, but will also introduce instability to the European trade.

As for the Iran's economy, Iran currency slumped; banks are facing the challenge of bad debt. And the European countries may withdraw investment because of the high risk from US sanction that US may take immediately. How much will the butterfly effect reach? We will pay an eye on this issue.