US Says Iran Will Buy American Farm Goods: Could US-Iran Trade Be Revived?

The Trump administration says it has laid out spending plans for Iran’s frozen assets as negotiations continue toward a final agreement to end the war in the Middle East.

Washington asserts that the released funds will be used to buy US agricultural products, which would then be delivered to Iran. This could inject $12 billion into bilateral trade between the two countries, which is heavily restricted and currently limited mostly to humanitarian goods.

Once close trading partners before the 1979 Islamic Revolution, US-Iran ties are now almost entirely frozen.

What’s happening with Iran’s frozen assets?

Like many issues in US-Iran negotiations, the two sides do not appear to fully agree on what has been decided.

After the first round of talks in Switzerland on June 21, 2026, and following the signing of a memorandum of understanding (MoU) last week, Iran’s chief negotiator, Mohammed Bagher Ghalibaf, said a deal had been reached to release $12 billion of Iran’s frozen funds.

However, US Vice President JD Vance declared that if Iranian assets are released, they will be used to buy American farm goods. “That money will make American farmers richer and feed the Iranian people,” Vance said.

President Trump also said: “We are negotiating very well to reach a fair and reasonable deal… corn, soybeans, everything they need will be bought from our farmers. The farmers are very happy.”

The following day, Trump posted on Truth Social: “The money and/or sanctions that the US Treasury releases will be placed in an escrow account controlled by the US, and will be used to buy food, medical supplies, exclusively from the US, including corn, wheat and soybeans from our great American farmers. These are things Iran desperately needs.”

“This is a humanitarian crisis and I see the need to help NOW, before it’s too late. Negotiations are going well!”

Iran, however, has not confirmed agreeing to such terms. Foreign Ministry spokesman Esmaeil Baghaei said the assets “will be released and Iran has full authority to use them to purchase any goods the country needs.” He stressed that any agricultural transactions would be based on “price and quality,” not conditions “imposed by Washington.”

Iran’s ambassador to Geneva, Ali Bahreini, also rejected the US view, stating that “Iran is the only country that decides what to do with those assets.”

How can an agreement be reached?

Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, said any attempt to attach spending conditions to Iran’s frozen assets would lead to prolonged negotiations. He warned that “many lawmakers oppose a deal with Iran, and multinational companies will be cautious about the political and credit risks of doing business with Iran.”

Professor Mohammad Reza Farzanegan of Philipps-Universität Marburg in Germany argued that the US president has a strong incentive to force Iran to buy American goods to “salvage his reputation in the illegal war against Iran.” He noted that US farmers, especially soybean exporters, have been hurt by Trump’s trade war with China. “Redirecting Iran’s frozen assets to buy US farm goods allows Washington to package sanctions relief as humanitarian trade, but it’s really about boosting his popularity among his base,” Farzanegan said.

Cullen Hendrix, senior fellow at the Peterson Institute, viewed the US proposal as a way to “avoid handing over money directly to Iran, which would be seen as a US surrender.”

Do the US and Iran trade with each other?

Yes. Despite tense relations and decades of sanctions, Washington and Tehran maintain a small but steady trade relationship, with the trade surplus leaning heavily toward the US.

According to US government data, total US-Iran trade in goods and services reached $838 million in 2024, up 3% from 2023. The vast majority ($742 million) was in services, with nearly $600 million flowing from the US to Iran. In goods, almost all was US exports to Iran.

Still, direct trade remains very small by international standards because broad sanctions restrict most commercial activity. Most transactions are in exempted sectors such as medicines, medical equipment and agricultural products.

Could a peace deal revive US-Iran trade?

Analysts say restoring broad trade ties is difficult because neither Washington nor Tehran appears willing to sell such an agreement domestically.

Hendrix said that if Tehran does buy farm goods at scale, it will likely target corn and soybeans, but not at the cost of long-term dependence on US exports. “Iran will not allow reliance on US exports to become central to its food system. The US should expect at most tactical compliance, not a pillar of Iran’s food security.”

Farzanegan noted that realistic trade options between the two countries are very limited: food, agricultural products, medicines, medical equipment and some chemicals or health-related products. He cited UN Food and Agriculture Organization (FAO) data showing Iran is expected to import about 22 million tons of grains this year, equivalent to a bill of billions of dollars.

Hufbauer added that Tehran could export crude oil and refined petroleum products at competitive prices to the US.

What is the history of US-Iran trade?

Before the 1979 Islamic Revolution, Tehran was one of Washington’s closest allies in the Middle East, with trade growing rapidly from the 1950s through the 1970s.

In 1953, the US helped restore Shah Mohammad Reza Pahlavi to power after overthrowing democratically elected Prime Minister Mohammad Mosaddegh, who wanted to nationalize the oil industry. Trade at that time was based on Iranian oil exports to the US, while the US sold aircraft, advanced military equipment, industrial machinery, cars, farm goods and technology to Iran.

American companies such as Boeing, General Electric and Bell Textron had significant business interests in Iran until 1979, when Ruhollah Khomeini overthrew the Shah’s dynasty in the Islamic Revolution. During the 444-day hostage crisis at the US embassy in Tehran in 1979, President Jimmy Carter froze billions of dollars in Iranian assets and banned Iranian imports into the US.

In 1995, President Bill Clinton imposed a comprehensive trade embargo. Secondary sanctions were lifted under the 2015 nuclear deal (JCPOA) signed between Iran, the US under President Obama and other nations, but Trump withdrew the US from the agreement during his first term in 2018.