The Trump administration is to reinstate all US sanctions on Iran removed under the 2015 nuclear deal.
The White House said it was "the toughest sanctions regime ever imposed" on Tehran. It targets both Iran and states that trade with it.
However, temporary waivers will be granted to eight countries to allow them to continue importing Iranian oil.
EU states that backed the nuclear deal have said they will protect EU firms doing "legitimate" business with Iran.
President Donald Trump withdrew from the agreement in May, describing it as "defective at its core" because it had not stopped Iran developing a ballistic missile programme and intervening in neighbouring countries.
"Sanctions are coming," he tweeted after Friday's announcement, referencing the TV series Game of Thrones and its motto "Winter is coming".