Foreign Affairs Minister Julie Bishop has said there is a "powerful argument" that US President Donald Trump's threat to scrap the Iran nuclear deal could imperil efforts to negotiate a peaceful outcome with North Korea.

In a significant sharpening of Australia's public rhetoric on the Obama-era Iran agreement, Ms Bishop said she had asked US officials, including Secretary of State Rex Tillerson, how they would counter the argument that North Korea could not trust the US if it walked away from previous international agreements.

Julie Bishop Bishop has asked how US officials would counter the argument that North Korea could not trust the US if it walked away from previous international agreements. Credit:AAP

Ms Bishop also said she had a "working assumption" that China was ultimately prepared to cut off North Korea's oil to force it into negotiations to stop its nuclear program.

The US President vowed during his election campaign to tear up the deal, but this month kicked the issue to the US Congress, effectively demanding it either come up with a tougher approach or he would follow through on his threat to scrap it.