President Donald Trump has warned that countries doing business with Iran will “NOT be doing business with the United States” as his administration reimposed sanctions on Iran Tuesday.
In an early morning tweet, Trump described the measures as “the most biting sanctions ever” and warned they would “ratchet up to yet another level” in November, when US sanctions on Iranian oil will be reimposed.
“I am asking for WORLD PEACE, nothing less!” Trump added.
Trump’s warning appeared to be aimed at the European Union, which is attempting to protect European businesses trading in Iran from facing US sanctions.
US sanctions are being unilaterally reimposed on Iran in waves following Trump’s decision to withdraw from the Iranian nuclear deal earlier this year.
The deal, officially titled the Joint Comprehensive Plan of Action, or JCPOA, is a landmark agreement to restrict Iran’s nuclear program in return for the lifting of international sanctions.
Orchestrated by the Obama administration, it was signed by Iran, some European countries, China and Russia in 2015.
Trump has long been a fierce critic of the deal, calling it “insane” and maintaining that, even with the current restrictions in place, Iran continues to pose a threat to the US.
In May, the US pulled out of the deal, with the first round of sanctions reimposed on Tuesday. They affect, among other things, the purchase or acquisition of US dollars by the Iranian government, the country’s auto industry and trade in gold or precious metals.
The second phase of US sanctions will come into effect in November and will target Iran’s crucial oil industry.
Iranian President Hassan Rouhani described the sanctions as “pyschological warfare” on Monday but said Iran was willing to hold talks with the US to resolve the matter.
Europe moves to shield businesses
On Tuesday, Europe launched an updated version of its “Blocking Statue” in an effort to protect EU companies doing business in Iran from being sanctioned by the US.
Despite the measures, businesses already adverse to operating in uncertain climates are likely to be even less inclined to trade with Iran amid the threat of punitive US measures.
On Tuesday, German carmaker Daimler announced it had suspended its activities in Iran “until further notice according to applicable sanctions.”
The company – which makes Mercedes-Benz cars – has not sold cars in Iran since 2010, but in 2016 had announced plans to return to Iran after economic sanctions were lifted.
Joe Kaeser, the chief executive of German industrial conglomerate Siemens, summed up the harsh realities of US economic influence when he told CNN in May that the company would stop all new deals in Iran, following Trump’s withdrawal from the nuclear deal.
“There is a primacy of the (US) political system. If that primacy is ‘This is what you are going to do,’ then that is exactly what we are going to do. We are a global company. We have interest and values and we have to balance both,” said Kaeser.
On Monday, the European Commission and the three European nations who negotiated the Iran deal – France, Germany and the UK – have stood by their commitment to the pact, saying in a joint-statement on Monday that they deeply regretted the reimposition of US sanctions.
The European powers said the agreement to curtain Iran’s nuclear program was “working and delivering on its goal,” and that they were determined to “protect EU companies doing legitimate business with Iran from the impact of US extra-territorial sanctions.”
But there is a concern among some analysts that if European businesses pull out of Iran, there will be little economic incentive for Iran to remain in the pact at all.
Rouhani floats talks with US
On Monday, Rouhani issued his own challenge to Trump, saying the Islamic Republic would welcome talks with the US “right now.”
“I don’t have preconditions. If the US government is willing, let’s start right now,” Rouhani said during an interview that aired on state television late Monday local time, just hours before the US renewed sanctions on Iran. “If there is sincerity, Iran has always welcomed dialogue and negotiations.”
The Iranian President also indicated that Iran would want the US to scale back sanctions before any talks could begin.
Trump’s national security adviser John Bolton, when asked about the offer by CNN’s Jake Tapper on “The Lead” Monday, dismissed it as possible “propaganda.”
“If the Iranians are really willing to come and talk about all of their malign behavior in the region and around the world, I think they’d find the President willing to do it,” Bolton said.
Sanctions come at delicate time for Iran
The collapse of the rial since Trump announced the US would pull out of the nuclear deal has already wreaked havoc on the average Iranian, and the first wave of sanctions will likely hit the vulnerable economy harder than most are currently anticipating.
Unemployment is shooting up, especially among the country’s youth, inflation is spiraling higher because of the cost of imported goods, and there have been water and power shortages due to a lack infrastructure investment after years of on-again, off-again sanctions.
Added to this are sporadic protests in the capital Tehran and throughout the country that started late last year and have persisted ahead of the return of the sanctions.
CNN’s John Defterios contributed to this report.
