Trump says anyone trading with Iran won't trade with U.S. as sanctions kick in

New U.S. sanctions against Iran have taken effect, and President Donald Trump, who defied Washington's allies to impose them, pledged that firms doing business with Tehran would be barred from doing business with the United States.

Tehran won't negotiate as long as Washington rejects 2015 nuclear deal

U.S. President Donald Trump, shown as a rally in Olentangy Orange High School in Lewis Center, Ohio, on Aug. 4, decided earlier this year to pull out of the 2015 deal to lift sanctions on Iran. (Leah Millis/Reuters)

New U.S. sanctions against Iran have taken effect, and President Donald Trump, who defied Washington's allies to impose them, pledged that firms doing business with Tehran would be barred from doing business with the United States.

Iran dismissed a last-minute offer from the Trump administration for talks, saying it could not negotiate while Washington had reneged on a 2015 deal to lift sanctions in return for curbs on Iran's nuclear program.

Trump decided this year to pull out of the agreement, ignoring pleas from the other world powers that had co-sponsored the deal, including Washington's main European allies Britain, France and Germany, as well as Russia and China. 

The European countries have promised to try to mitigate the impact of renewed U.S. sanctions to persuade Tehran to continue to abide by the deal's terms. But that has proved difficult: European companies have pulled out of Iran, arguing they cannot risk the prospect of damage to their U.S. business.

"These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!" Trump tweeted on Tuesday.

We are always in favour of diplomacy and talks. ... But talks need honesty.-  Iran's President Hassan Rouhani

White House national security adviser John Bolton said on Monday that Iran's only chance of escaping sanctions would be to take up an offer to negotiate with Trump for a tougher deal.

"They could take up the president's offer to negotiate with them, to give up their ballistic missile and nuclear weapons programs fully and really verifiably," Bolton told Fox News. 

"If the ayatollahs want to get out from under the squeeze,  they should come and sit down. The pressure will not relent while the negotiations go on," said Bolton, one of the administration's main hawks on Iran.

'Remove the knife'

Washington accepts that Iran has complied with the terms of the 2015 deal reached under Trump's predecessor, Barack Obama, but says the agreement was flawed because it is not strenuous enough. Iran says it will continue to abide by the deal for now, if other countries can help protect it from the economic impact of Washington's decision to pull out. 

The so-called snapback sanctions target Iranian purchases of U.S. dollars, metals trading, coal, industrial software and its auto sector. 

In a speech hours before the sanctions were due to take effect, President Hassan Rouhani of Iran rejected any negotiations as long as Washington was no longer complying with the deal it reached three years ago.

Iranian President Hassan Rouhani, seen in this July photo, says his country can rely on China and Russia to help its banking and oil sectors. (Iranian Presidency Office via Associated Press)

"If you stab someone with a knife and then you say you want talks, then the first thing you have to do is remove the knife," Rouhani said in a speech broadcast live on state television. 

"We are always in favour of diplomacy and talks. ... But talks need honesty."

He dismissed the proposal for talks as a stunt to sow chaos in Iran and confuse American voters at home ahead of mid-term elections in November. He said Washington was becoming isolated internationally and would come to regret imposing sanctions against the views of its allies and other world powers. 

The nuclear deal is closely associated in Iran with Rouhani, a relative moderate who won two landslide elections on promises to open up its economy to the outside world. 

European countries fear that by abandoning the deal, Washington risks undermining Rouhani and strengthening his more hardline opponents, who have long argued that the West would never allow Iran to prosper. 

In a joint statement on Monday from Britain, France, Germany and the EU as a bloc, they said: "We deeply regret the reimposition of sanctions by the U.S."

Since the sanctions were initially lifted two years ago, Iranian oil exports have risen. 

But most Iranians have yet to see major economic improvement as a result of the deal, and the prospect that Washington would re-impose sanctions helped drive a collapse in the value of Iran's currency this year, raising the cost of imports. 

There have been protests in Iran against rising prices, and the government has responded firmly.