The US President in Brussels last year (Picture: PA).
Donald Trump has signed an executive order targeting Iran's supreme leader and his associates with financial sanctions.
The US President believes Ali Khamenei is responsible for their hostile conduct.
He said that the United States do not seek conflict with Iran, but they shall increase pressure on the Middle East adversary to prevent it from developing nuclear weapons and supporting militant groups.
The sanctions are a result of Iranian forces shooting down a $100 million US surveillance drone, along with other aggression.
Speaking in the Oval Office, the President said:
"These measures represent a strong and proportionate response to Iran's increasingly provocative actions.
"We will continue to increase pressure on Tehran until the regime abandons its dangerous activities and its aspirations, including the pursuit of nuclear weapons, increased enrichment of uranium, development of ballistic missiles, engagement and support for terrorism, fuelling of foreign conflicts and belligerent acts directed against the United States and its allies."
However, Iran's naval commander, Rear Admiral Hossein Khanzad, has reportedly warned that Iranian forces would not hesitate to act again and shoot down more US surveillance that enters Iranian airspace:
"We confidently say that the crushing response can always be repeated, and the enemy knows it."
Tensions with Iran have been running high since the United States pulled out of a 2015 nuclear deal that world powers signed with Iran and applied crushing sanctions on the country's economy.
Iran claims that the sanctions are "economic terrorism" as it has essentially stopped them from being able to sell oil internationally.