How Donald Trump's trade threats to Iran could affect New Zealand

Once again, a tweet from US President Donald Trump has caused shock around the world. 

Mr Trump issued a threat on Twitter on Tuesday (local time) saying anyone doing business with Iran will not be doing business with the United States. 

That tweet and his unilateral sanctions on Iran could damage businesses all the way from Europe to Whanganui. 

Pacific Helmets, a small successful Whanganui-based company, was on the brink of selling its safety helmets in Iran - but then Mr Trump came along. 

The US President is unilaterally imposing sanctions on Iran, and on top of that, has issued a serious threat by saying: "Anyone doing business with Iran will NOT be doing business with the United States". 

It all started in May, when the US pulled out of the Iran nuclear deal. Mr Trump said the agreement was a "horrible one-sided deal" and wouldn't have stopped Iran from developing nuclear weapons. He said new sanctions would be imposed on Iran.

The Iranian economy was beginning to accelerate. But defying the United States is simply too risky for some companies. 

Rolls Royce, which exports engines to Iran, ceased all business immediately. Major European companies like Peugeot and manufacturing giant Siemens are following suit - and New Zealand is far from immune. 

New Zealand's exports to Iran are worth $120 million annually, according to New Zealand commercial law firm Chapman Tripp. But that's a pittance compared to New Zealand's $8 billion in exports to the United States. 

Rotorua MP Todd McClay says he believes trade with Iran will drop when sanctions are in place. 

When he was Trade Minister, Mr McClay took a delegation to Iran - including 14 companies that wanted to do new business there. None have done so, as they were hamstrung by the US. 

New Zealand's current trade to Iran is mostly meat and dairy, and that's allowed by the United States because it's considered "humanitarian exports". 

"About 95 percent of our product is humanitarian like food or medicine, and it's not covered by the sanctions," says Foreign Minister Winston Peters. 

But the sanctions and threats do stymie businesses like Pacific Helmets.

Mr McClay says tweeting is "not a way to conduct trade policy".