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 United States. I am asking for WORLD PEACE, nothing less.” Within hours of the sanctions taking effect, German carmaker 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.

“I feel like my life is being destroyed. Sanctions are already badly affecting people’s lives. I can’t afford to buy food, pay the rent,” said one construction worker on the streets of the capital.

The sanctions re-imposed 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 per cent 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.

In a statement on Monday before the sanctions were re-imposed, Trump said he was “open to reaching a more comprehensive deal” with Iran, which covered “its ballistic missile programme and its support for terrorism”. But his Iranian counterpart Hassan Rouhani dismissed the idea of talks while crippling sanctions were in effect.

“They want to launch psychological warfare against the Iranian nation,” Rouhani told state television. “Negotia­tions with sanctions don’t make sense.”

Published in Dawn, August 8th, 2018