After a ballistic missile test by the Islamic republic, President Donald Trump’s administration on Friday imposed new sanctions on Iran. The U.S. claims the missile test was a violation of a United Nations resolution.

Along with the new sanctions, Trump’s travel ban against Iran and six other majority-Muslim countries drew vows of retaliation from Tehran.

Richard Aboulafia, vice president of analysis at Virginia-based industry consultancy Teal Group said, “The Trump administration is absolutely determined to ratchet up tensions and the Iranians will of course, being hardliners there, want to do the same.”

Boeing announced an agreement for Iran Air, the country’s flag carrier, in December, to buy 50 of its narrow-body 737 passenger jets and 30 of the wide-body 777 aircraft. Based on list prices for the planes, Boeing valued at the deal at $16.6 billon. Industry observers say Tehran may pull out of the deal if tensions continue to worsen. 

Besides the sale, the Boeing deal includes maintenance services and ongoing support, such as spare parts for the jets.

Russell Solomon, Moody’s analyst who covers the aerospace and defense industry, said,  “It’s a risk, but not something that will overwhelm [Boeing].” He added, ”They do have a tremendous amount of operating and financial flexibility because of strength of the balance sheet, a strong liquidity profile and a very significant order book.”

According to Daniels, “At the end of 2016, Boeing’s backlog stood at $473 billion with more than 5,700 commercial airplane orders. Boeing led Airbus in commercial airplane deliveries last year, 748 aircraft compared with 688 for Airbus.”

A Boeing spokesman said on Friday, that the Chicago-based company is still operating under the U.S. Treasury Department’s Office of Foreign Assets Control license who, during the Obama administration, provided federal authorization for the sale. “Should we receive new guidance from the Treasury Department, we will act accordingly,” the Boeing official stated.

According to the Moody’s analyst, the economics of the Iran deal were “far less compelling than they are for Boeing on average when it conducts business with airline carriers.” He went on to explain that some of the orders were for older model planes, while the current generation planes are considered more lucrative and desirable. Additionally, he said that Boeing “can afford to give a bigger discount [on the current generation planes] to keep the production line humming along.”

The new sanctions imposed on Friday by Trump targets individuals and entities that support Iran’s ballistic missile program and to the Iran’s Revolutionary Guard Corp’s Quds Force. 

According to Iran, the missiles are not capable of carrying nuclear warheads and were intended for defensive purposes, so they were not in violation of any U.N. resolution.

Iran’s Tasnim news agency reported that on Saturday, new military exercises were conduced, to test missile and radar systems “to deal with hypothetical enemy’s aerial attacks” on sensitive sites. Tasnim also reported on Monday, that Iran unveiled a new guided rocket and assault weapons, to show off what it referred to as Iran’s “self-sufficiency in arms production.”

“The first airplanes under the Boeing deal are scheduled for delivery in 2018. Last month, France’s Airbus delivered its first passenger jet to Iran Air under a separate commercial aircraft contract that includes wide-body A380s, the world’s largest passenger jet,” Daniels wrote, adding, “Iran’s aging fleet of passenger jets is among the oldest in the world due to commercial and financial sanctions that were in place for decades. The average age of Iran Air’s planes now exceeds 20 years and Tehran and been looking to Airbus, Boeing and other airplane manufacturers to modernize its fleet.”

On Saturday, Iran’s Fars news agency reported that another Western airplane manufacturer, the French-Italian aircraft company ATR, is preparing to sell turboprop short-haul airplanes to Iran. Discussions were scheduled for Sunday.

Financing airplanes to Iran remains risky business, analysts say. This is, in part, because Iran is not a signatory country to the Cape Town Treaty, which provides legal remedies for default in financing agreements as well as the repossession of capital goods such as aircraft.

“Boeing will probably have to backstop a lot of that [financing] on its own,” said Solomon. He believes Boeing may not go very far without third-party financiers. Just as Airbus is believed to have done: provided backstop financing for as many as six passenger jets to Iran, but relying on third-party financiers for the rest.