Gregory Schulte, the US ambassador to the International Atomic Energy Agency in Vienna, noted in a speech on the Iranian nuclear crisis last night that Iran's top 25 trading partners included 10 EU countries.
Mr Schulte told an audience at Chatham House in London that the US already has "about every sanction in place already" and indicated that should sanctions happen, a major onus would be put on the EU from Washington.
With the threat of sanctions looming closer as the UN security council discusses the crisis, Mr Schulte said: "We are going to have to look at how we use the tools available to us to get this country off the path it is on."
Like the foreign secretary, Jack Straw, in a speech earlier in the week about Iran, Mr Schulte said there were already painful economic consequences being felt in the country. "There is capital flight, the value of their stockmarket has plummeted ... this is not good for a country that has said they want to improve the lot of the ordinary Iranian," he said.
Mr Schulte painted a pretty bleak picture of Iran's position, saying the leadership in Tehran had "thus far chosen a course of flagrant threats and phoney negotiation".
They rejected proposals without reading them, despite being offered significant deals he said.
But he sounded a cautiously optimistic note when he said that he was not sure Tehran was so comfortable with its increasing isolation. "I don't think the leadership of Iran want to make Iran into North Korea", he said.
The ambassador said that he understood there were some signs that there was a discussion going on within the Iranian leadership about whether it was on the right course. He said that Russia and China's tougher rhetoric on the issue had genuinely unsettled the Iranians.
Mr Schulte said it was interesting for him to be told by some fellow members of the IAEA's 35-member board that Iran had made various threats against them, publicly and privately. He said most of the threats were empty and had effectively backfired, hardening attitudes against Tehran's stance.
The tactics may not be working within Iran either. The New York Times this week reported cracks emerging in the Iranian leadership. One senior official told it six months of the hardline Ahmadinejad presidency was all it had taken for the US to bring the Islamic Republic before the security council for the first time in its 27-year history.
Speaking to Mr Mr Schulte, an American member of Chatham House drew applause after arguing that he wished Washington had been more subtle about recognising and helping its friends. He said that the previous Iranian president, Mohammad Khatami, and the Palestinian president, Mahmoud Abbas, were reforming and moderate but had not been given enough international support. "Now we have President Mahmoud Ahmadinejad in Iran and Hamas in the Palestinian parliament".
Yesterday it emerged that the US ambassador to Iraq, Dr Zalmay Khalilizad, had been allowed by Washington to have contact with Iran, but only to discuss Iraq. Last night Mr Schulte said that when he and other ambassadors sent a demarche, a formal written diplomatic representation, to Iran's ambassador expressing concern at Tehran's position, his driver had to deliver it because the US had no diplomatic relations.
"My driver said that the Iranian ambassador was a very nice man, " Mr Schulte told Chatham House.
