Donald Trump says rest of world must choose between trade with US or Iran

European companies should still be able to trade with Iran despite new US sanctions, according to minister of state for the Middle East, Alaistair Burt.

The announcement came just before Donald Trump tweeted on Tuesday that “anyone doing business with Iran will NOT be doing business with the United States”.

The EU has launched a “blocking statute”, designed to allow companies within the bloc to sue the Trump administration, if they are adversely affected by US sanctions, and has encouraged member states to continue trading with Tehran.

This legislation should protect businesses in member states who do not wish to break off economic ties with Tehran despite the reinstatement of US sanctions which came into effect on Tuesday, Mr Burt told the BBC.

“If a company fears legal action taken against it and enforcement action taken against it by an entity in response to American sanctions then that company can be protected as far as EU legislation is concerned,” added Mr Burt.

“It is a commercial decision for companies whether they continue to work in Iran.”

Foreign Secretary Jeremy Hunt issued a joint statement with EU foreign ministers on their “determination to protect” European businesses working with Iranian companies.

The comments come as Mr Trump reiterated threats against international firms that choose to ignore the sanctions, which snapped back into place following the US withdrawal in May from the 2015 nuclear deal.

The Obama-era deal, which Mr Trump promised to scrap before taking office, gave Iran sanctions relief in return for curbs on its nuclear programme.

“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,” the president tweeted on Tuesday.

“Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!”

EU officials, however, have said the US’ demands do not apply beyond its borders.

Firms which decide to follow the Washington directive will need to seek permission from the European commission first, and a mechanism will allow EU companies whose business is affected by the US move to sue the Trump administration for damages in national courts of member states.

A similar measure was brought in to protect EU companies after the US reimposed sanctions against Cuba, to mixed effect.

It is also unclear whether the EU legislation could be brought over into UK law to apply to Britain once the country officially leaves the bloc next March.

A joint statement from EU foreign ministers on Monday said there is a “determination to protect” member states’ economic interests.

The other members of the Iran nuclear deal – the UK, France, Russia, China and Germany – have vowed to support it.

Also on Monday, Iranian president Hassan Rouhani dismissed the US sanctions and a new round proposed for November as “psychological warfare” against the country.

Agencies contributed to this report