Iran's Foreign Minister Mohammad Javad Zarif. Picture: REUTERS
Iran's Foreign Minister Mohammad Javad Zarif. Picture: REUTERS

Tehran —  US President Donald Trump warned the world against doing business with Iran on Tuesday as he hailed the “most biting sanctions ever imposed”, triggering a mix of anger, fear and defiance in Tehran.

“The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level,” Trump wrote on Twitter. “Anyone doing business with Iran will NOT be doing business with the US. I am asking for WORLD PEACE, nothing less.”

Within hours of the sanctions taking effect, German car maker Daimler said it was halting its business activities in Iran.

Trump’s May withdrawal from a landmark 2015 nuclear agreement had already spooked investors and triggered a run on the Iranian rial long before nuclear-related sanctions went back into force.

The sanctions reimposed on Tuesday, which target access to US banknotes and key industries such as cars and carpets, were unlikely to cause immediate economic turmoil. Iran’s markets were actually relatively buoyant, with the rial strengthening by 20% since Sunday after the government relaxed foreign exchange rules and allowed unlimited, tax-free gold and currency imports.

But the second tranche, which kicks in on November 5 and targets Iran’s vital oil sector, could be far more damaging — even if several key customers such as China, India and Turkey have refused to significantly cut their purchases.

Iran said on Tuesday  the US was  "isolated" in its hostility to the Islamic republic.

"Of course, American bullying and political pressures may cause some disruption, but the fact is that in the current world, America is isolated," foreign minister Mohammad Javad Zarif told reporters on Monday, according to the semi-official ISNA news agency.

"We deeply regret the reimposition of sanctions by the US," EU diplomatic chief Federica Mogherini said in a statement jointly signed with the foreign ministers of Britain, France and Germany.

"We are determined to protect European economic operators engaged in legitimate business with Iran," the statement said.

The renewed hostility has added to tension inside Iran, which has seen days of protests and strikes in multiple towns and cities over water shortages, high prices and wider anger at the political system. Severe reporting restrictions have made it impossible to verify the swirl of claims coming through social media, but journalists did confirm a heavy build-up of riot police on Sunday night in the town of Karaj, just west of Tehran, that has been a focal point of unrest, and said mobile internet had been cut in the area.

With senior religious authorities calling for a crackdown on graft, the judiciary said on Sunday it had arrested the vice-governor of the central bank in charge of foreign exchange, Ahmad Araghchi, along with a government clerk and four currency brokers. 

Trumps offer on Monday of more negotiations was rejected. Zarif suggested it was hard to imagine negotiating with the man who tore up an agreement on which Iran and world powers had spent the "longest hours in negotiating history". "Do you think this person [Trump] is a good and suitable person to negotiate with? Or is he just showing off?" he said.

There have been ongoing rumours that Trump and Rouhani could meet in New York in August, where they are both attending the UN General Assembly — although Rouhani reportedly rejected US overtures for a meeting at last year’s event.

Reuters, AFP