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Trump warns world against business with Iran as sanctions return

AFP  |  Tehran 

US warned the world against doing business with as reimposed "the most biting sanctions ever" on the Islamic republic, triggering a mix of anger, fear and defiance in

Trump's withdrawal from a landmark 2015 nuclear deal with had spooked investors and triggered a run on the Iranian rial long before the punishing sanctions went back into force.

The newly reimposed sanctions, which target access to US banknotes and key industries such as and carpets, were unlikely to cause immediate economic turmoil.

Iran's markets were actually relatively buoyant, with the rial strengthening by 20 percent since Sunday after the government relaxed foreign exchange rules and allowed unlimited, tax-free gold and currency imports.

But the second tranche of sanctions, 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, and have refused to significantly cut their purchases.

"The 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

"Anyone doing business with will NOT be doing business with the I am asking for WORLD PEACE, nothing less."

European governments -- who signed the Iran nuclear deal along with -- are infuriated by Trump's strategy that has prompted many of their large firms to leave Iran for fear of US penalties.

Within hours of the sanctions taking effect, German carmaker said it had "suspended our already limited activities in Iran in accordance with the applicable sanctions".

Trump said Monday that he was open to new talks to reach a "more comprehensive deal" with Iran.

"We want to see a much broader retreat by Iran from their support for international terrorism, their belligerent military activity in the and their ballistic missile, nuclear-related programs," told

"There's a lot going on here that Iran needs to be held accountable for."

But Iranian has dismissed the idea of talks while sanctions are in effect, and accused of waging "psychological warfare."

In Tehran, residents were on edge.

"I feel like my life is being destroyed," said one on the streets of the capital. "I can't afford to buy food, pay the rent."

The return of US sanctions left some of Washington's partners unimpressed.

said that the "Americans have really not got this right."

The nuclear deal was important "not only to the region's security but the world's security," he told the

Russia's foreign ministry said it was "deeply disappointed" by the return of sanctions, adding that it would do "everything necessary" to save the 2015 nuclear deal.

Iranian Foreign told reporters that the global reaction to Trump's move showed that the US was diplomatically isolated.

Most Iranians see US hostility as a basic fact of life, so their frustration is largely directed at their own leaders for not handling the situation better.

"Prices are rising again, but the reason is government corruption, not US sanctions," said Ali, a 35-year-old decorator in

Long-running discontent over high prices, unemployment, water shortages and the lack of political reform has sparked numerous protests over the past week, though verifiable information is scarce due to heavy reporting restrictions.

Many hope and believe that Iran's leaders will "drink the poison cup" and negotiate with the US eventually.

There have been rumours that Trump and Rouhani could meet in in September on the sidelines of the -- though Rouhani reportedly rejected US overtures for a meeting at last year's event.

Iran's regional rivals and have welcomed the tough new US policy.

Israeli hailed the renewed sanctions as "an important moment for Israel, for the US, for the region, for the whole world."

Iran's currency has lost around half its value since Trump announced the US would withdraw from the nuclear pact, but has surged since Sunday, following the arrest of the central bank's and new plans being announced.

The new rules mean foreign exchange bureaus will reopen after an attempt to fix the value of the rial in April backfired spectacularly, with corrupt traders making a fortune out of a mushrooming black market.

Ali Vaez, Iran for the International Crisis Group, told AFP that the sanctions would inflict "significant harm" on the Iranian economy.

"But this is not the first time that the Iranian leadership is dealing with sanctions," Vaez said.

"I doubt that in the next two years we would see the collapse of the government or the regime in Tehran.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, August 08 2018. 14:00 IST