Trump threatens trade allies over Iran - all in the name of peace

Using his usual megaphone diplomacy via social media from his Bedminster golf resort where he was reportedly on a "working holiday", Trump described the measures as “the most biting sanctions ever imposed”.

They target the purchase of US currency by the Iranian government, the country's trade in gold and other precious metals, graphite, aluminium, steel, coal and software used in industrial processes, transactions in the Iranian rial currency, issuance of sovereign debt and Iran's automotive sector.

A second phase is planned for November which would hit Iran's oil and shipping industries, petroleum trading and transactions by foreign financial institutions with the Central Bank of Iran.

“Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!,” Trump said.

The sanctions were reimposed after Trump reneged on the 2015 agreement orchestrated by his predecessor Barack Obama which lifted sanctions in return for curbs on Iran's nuclear programme.

Iranian President Hassan Rouhani said Trump wanted to “launch psychological warfare against the Iranian nation", adding that the US government had "turned their back on diplomacy".

"Negotiations with sanctions doesn't make sense. We are always in favour of diplomacy and talks... but talks need honesty," he said.

The EU unveiled a "blocking statute" which is intended to protect European firms doing business with Iran despite the new US sanctions, the European Commission said.

“The updated Blocking Statute is part of the European Union's support for the continued full and effective implementation of the Joint Comprehensive Plan of Action (JCPOA) – the Iran nuclear deal, including by sustaining trade and economic relations between the EU and Iran, which were normalised when nuclear-related sanctions were lifted as a result of the JCPOA,” it said in a statement.

EU foreign policy commissioner Federica Mogherini said it was up to Europeans to decide who they wished to trade with.

“We are doing our best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran because we believe this is in the security interests of not only our region, but also of the world. If there is one piece of international agreements on nuclear non-proliferation that is delivering, it has to be maintained,” she said on a trip to New Zealand.

"We are encouraging small and medium enterprises in particular to increase business with and in Iran as part of something (that) for us is a security priority," Mogherini said, explaining that trade is an integral part of the nuclear deal.

The foreign ministers of France, Germany and the UK said they “deeply regret” Trump's decision.

“The lifting of nuclear-related sanctions is an essential part of the deal – it aims at having a positive impact not only on trade and economic relations with Iran, but most importantly on the lives of the Iranian people,” they said in a joint statement.

“We are determined to protect European economic operators engaged in legitimate business with Iran, in accordance with EU law and with UN Security Council resolution 2231.”