Described by Trump as the "strongest sanctions our country has ever issued", Monday's penalties target the Islamic Republic's banking, energy and transport sectors, and according to Secretary of State Mike Pompeo, aim to "fundamentally alter the behavior of the Islamic Republic of Iran's leadership".
Washington re-introduced sanctions against Iran on Monday, restoring measures lifted under a 2015 nuclear deal negotiated by the administration of President Barack Obama, and adding 300 new designations including Iran's oil, shipping, insurance and banking sectors.
Iran said it would defy tough sanctions reimposed by Washington on Monday, dismissing as "economic war" the usa drive to curb Tehran's missile and nuclear programs and diminish its influence in the Middle East.
The sanctions reimposed today are the largest ever single-day action targeting the Iranian regime, the U.S. Department of the Treasury said in a statement, noting that the Treasury's Office of Foreign Assets Control (OFAC) sanctioned more than 700 individuals, entities, aircraft, and vessels.
Mr Pompeo said more than 20 countries had already cut their oil imports from Iran. "We're working with other countries to get alternative supplies for countries that are buying and I think that's critical over an extended period of time", he said.
"The maximum pressure exerted by the United States is only going to mount from here". Trump warned that those who don't wind down their economic ties to Iran "risk severe consequences".
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Labour leader Mr Corbyn said: "What we've heard today are half measures and quick fixes while austerity grinds on". The Chancellor dismissed suggestions that he had chopped down the "magic money tree" and burnt the lot.
"Allowing these activities to continue for the time being will improve ongoing oversight of Iran's civil nuclear program and make these facilities less susceptible to illicit and illegal nuclear uses", he said.
Oil markets have been preparing for the sanctions for months.
Israel had long opposed the Iran nuclear deal, saying it was too limited in scope and timeframe. "This is not about hurting the people of Iran, but we will not let money be diverted to humanitarian purposes and then put for terrorist activities".
They have promised to support European firms that do "legitimate business" with Iran and have set up an alternative payment mechanism - or Special Purpose Vehicle (SPV) - that will help companies trade without facing USA penalties.
Foreign Minister Mohammad Javad Zarif said U.S. "bullying" was backfiring by making Washington more isolated, a reference to other world powers opposed to the initiative.
The sanctions end all economic benefits the United States had granted Tehran for its 2015 nuclear deal with world powers, though Iran for now continues to abide by the accord that saw it limit its enrichment of uranium.
The statement was made on the day when the second package of U.S. sanctions, re-introduced after Washington's withdrawal from the Iran nuclear deal and targeting, in particular, Iran's oil sector, takes effect.
His decision was widely criticized overseas and by Democrats at home, who said that while imperfect, the pact had placed the Iranian nuclear program under the tightest scrutiny ever.
Iran's economic chaos sparked mass anti-government protests at the end of past year which resulted in almost 5,000 reported arrests and at least 25 people being killed.