“We will proudly break the sanctions,” Rouhani said during a meeting of government officials in the Iranian capital.
In Washington, Secretary of State Mike Pompeo said: “The Iranian regime has a choice. It can either do a 180-degree turn from its outlaw course of action and act like a normal country, or it can see its economy crumble.”
It will take many weeks or months before the effectiveness of the administration’s maximum-pressure campaign against Iran can be judged. But what already is clear is that the renewed sanctions will be greeted by threats hurled between Washington and Tehran as the two governments grow more confrontational.
“We should look at today as the first day of an escalating maximum-pressure campaign, not a new status quo,” said Richard Goldberg, an adviser at the Foundation for Defense of Democracies. “We’re going to see an enormous amount of pressure brought to bear on the regime, to the point where it may have to consider negotiating with the Trump administration or the regime will collapse.”
The sanctioning of hundreds of Iranian individuals, companies and organizations was the final result of President Trump’s decision in May to withdraw from the nuclear deal, known officially as the Joint Comprehensive Plan of Action (JCPOA).
The sanctions target Iranian oil, banks and shipping companies. But many prominent banks and companies were left off the list of more than 700 names, as well as entire sectors like mining and computer sciences, suggesting a strategic decision to hold back some names for future sanctions.
Eight nations were given temporary waivers, including Iran’s two biggest oil customers, China and India. Turkey, which buys natural gas from Iran, also was exempted from sanctions. Waivers also were given to projects underway at three nuclear power plants related to impeding Iran’s ability to reverse course and restart its nuclear program.
U.S. officials say their goal is to force the Iranian government to stop its support of militants in the region and, eventually, renegotiate the nuclear agreement forged by the Obama administration.
But it is uncertain whether Iran would bend to American will under another round of pressure or whether it can afford to simply wait until there is a new U.S. president.
Patrick Clawson, an Iran expert at the Washington Institute for Near East Policy, said he met Iranians at a recent conference in Moscow whom he described as confident they could ride out the latest wave of sanctions.
“ ‘We can outlast Trump’ was a big theme,” he said.
But in Tehran, some residents expressed worries about the future.
One man, a 45-year-old manual laborer, said in a telephone interview that low salaries and high inflation mean that his family “cannot travel even to our own villages” to visit relatives. He spoke on the condition of anonymity out of fear of government reprisal.
“I work two shifts now, including the weekends, and we buy whatever we can afford without worrying about the quality,” he said.
Another resident, a 30-year-old woman who works at a private distribution company, said by phone that she pays exorbitant amounts on the black market for prescription medicine for her parents. She also spoke on the condition of anonymity so she could speak freely about conditions in Iran.
Neither Iran nor the United States “wants the best for the Iranian people,” she said. “So I don’t have any hope.”
Rouhani boasted of Iran’s ability to keep selling oil even with sanctions in place.
“The fact that the U.S. has exempted eight countries from the sanctions after they threatened to bring Iran oil exports to zero, isn’t this a victory for us? And isn’t this a retreat for the United States?” he said. “The Islamic Republic of Iran can sell its oil and will sell its oil even if the eight countries had not been exempted from the sanctions.”
Iranian retaliation, if any, could come through its militant proxies in Syria, Lebanon, Iraq and Yemen, or in the Persian Gulf, where oil tankers and U.S. Navy vessels ply the waters.
“They have a history of hacking the Saudi infrastructure, and they can attack the U.S. infrastructure,” he said. “I worry about them wreaking havoc on major corporations or financial institutions,” said Cliff Kupchan, chairman of the Eurasia Group, a political risk consulting firm.
Kelsey Davenport, director of nonproliferation policy for the Arms Control Association, said there is danger of the U.S. overreacting to Iranian rhetoric.
Iran “will continue to remind the international community that if the deal collapses or it no longer benefits Iran, it can ramp up its nuclear activity,” she said. “It’s critical to distinguish between the rhetoric and steps that actually violate the deal.”
It is unclear whether the reimposed sanctions, which are opposed by all but a handful of countries in the world, will signal the end of the nuclear deal.
Britain, France, Russia, China and Germany, which all negotiated alongside the United States, insist they want to keep it going. Iran has said it could walk away and resume its nuclear program, a step few expect Tehran to take.
“Tehran must calculate what gives them more leverage, sticking to the JCPOA or resuming their frozen nuclear activities,” said Karim Sadjadpour, a policy analyst with the Carnegie Endowment for International Peace. “In the former scenario, they risk appearing feckless; in the latter scenario, they risk appearing reckless.”
The European Union is attempting to devise an alternative “special purpose vehicle” to continue trade with Iran, but it has had trouble finding a country willing to host it. Even the Europeans, who consider the nuclear deal essential to their national security, may be softening their support after Danish officials accused Iran of trying to assassinate an Arab separatist leader living in Denmark.
Pompeo said that “multiple lines of effort” are being deployed to pressure Tehran and that this week’s listings are not the last word. The administration is expected to designate more names and aggressively enforce penalties by applying secondary sanctions on anyone who does business with them.
“Those are the only two cards they have to play,” said Adam M. Smith, a former adviser in the Treasury Department’s Office of Foreign Assets Control, which monitors sanctions compliance. “More sanctions and enforcement are the two screw-tightening exercises the U.S. government has. There’s not much more they can do.”
Morello reported from Washington. James McCauley in Paris and Quentin Ariès in Brussels contributed to this report.