Donald Trump administration is 'preparing to renew Iran sanctions'

Rumoured decision comes in the wake of inflamed relations thanks to US ‘Muslim ban’ and Iranian missile test

After an unrelated meeting at the White House on February 2, 2017, US President Donald Trump said that "nothing is off the table" in relation to current disagreements between the US and Iran (Getty)

The US government is preparing to levy new sanctions on Iran in what is widely being viewed as a punitive measure since Tehran tested a mid-range ballistic missile last week, US officials have said.

Donald Trump’s administration said that Iran was “on notice” after what Tehran eventually said was a non-nuclear ballistic missile test, which took place last Sunday.

The move, which reflects Mr Trump’s desire to fulfil his campaign promise about “being tough on Iran,” is expected to come as early as Friday.

The White House and the State Department have so far declined to comment on the rumoured measures, which US officials leaked to the Associated Press.

The reported decision comes after Mr Trump signed a far-reaching executive order temporarily banning citizens of Iran and six other Muslim countries - even those with green cards or residency visas - from entering the US.

In retaliation, Iran has curtailed all travel visas for Americans for an indefinite amount of time, and the Central Bank announced the country will no longer use the US dollar for official statistics or financial reporting.

The timing of the missile test - which enraged Iranian foe and US ally Israel, although the UN has not yet determined if it broke 2015’s nuclear accord - is also thought to be related to Mr Trump’s ‘Muslim ban’.

International sanctions which have crippled Iran’s economy for decades were lifted as part of the historic 2015 nuclear agreement, in which Tehran agreed to curbs on its nuclear weapons programme.

The US maintains a separate sanctions list mainly for terror-related offences, which is unrelated to nuclear issues.

Under President Barack Obama the US imposed sanctions on two dozen Iranian individuals, companies and government agencies, which Mr Trump criticised for being “weak”.

It is unclear which entities will be penalised under the proposed new sanctions.

Both Democrat and Republican politicians on the Senate’s Foreign Relations Committee urged that the US should not let Iran’s missile test - one of several in the last 18 months - go unpunished.

“Iranian leaders must feel sufficient pressure to cease deeply destabilising activities,” the committee said in a statement this week.

Iran, meanwhile, has dismissed the threats of retaliation.

Ali-Akbar Velayati, the foreign adviser of Ayatollah Ali Khamenei, Iran's supreme leader, predicted this week that “the US will be the final loser.”

“It is not for the first time that a naive person from the US poses threats to Iran,” he told state media.

The Associated Press contributed to this report