United States President Donald Trump has pulled the country out of the nuclear accord deal that was negotiated by the Obama administration with Iran. President Trump’s decision means harsh economic sanctions will be levied upon Iran which may have far-reaching repercussions to businesses not just in Iran but in the U.S. and Europe.

According to President Trump, his decision was predicated on making the world “safer”. Throughout his 2016 campaign, President Trump was regularly criticizing the agreement referring to it as “defective to its core”. He believes that if sanctions are not imposed, Iran will start arming itself with nuclear weapons:

“If we do nothing, we know exactly what will happen. In just a short period of time, the world’s leading state sponsor of terror will be on the cusp of acquiring the world’s most dangerous weapons.”

Benjamin Netanyahu, Prime Minister of Israel, called Trump’s decision a “historical move.”

President Trump revealed that Netanyahu provided documents which showed Iran tried to develop a nuclear bomb before 2003. Although no evidence was presented, the President said the documents were enough proof that Iran lied and should not be trusted.

Former President Barack Obama called President Trump’s decision “misguided”:

“The consistent flouting of agreements that our country is a party to risks is eroding America’s credibility and puts us at odds with the world’s major superpowers.”

The nuclear accord deal included powerful European economies such as Germany, France and Britain. It lifted most economic sanctions levied on Iran by the U.S. and other countries on condition Iran would institute restrictions on its nuclear development program. Specifically, the restrictions should prevent Iran from making a bomb and at the same open itself up to regular nuclear weapons inspections.

Iran has repeatedly denied producing nuclear weapons.

The new round of sanctions will punish Iran by curtailing its ability to conduct business or sell oil. While this will affect many Iranian businesses and consumers, it may have repercussions on companies located in the U.S. and Europe.

Steven Mnuchin, Treasury Secretary, said that agreements by Boeing and Airbus to sell commercial airplanes to Iran will be terminated. The deals are estimated to cost these companies billions of dollars in sales.

Because Iran will be limited in its capacity to sell oil, as the fifth largest producer, the sanctions may exert upward pressure on the price of oil.

Representatives from the White House said the sanctions on Iran will be imposed immediately. However, they would institute measures that provide grace periods for businesses to plan ahead in view of the sanctions.

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