Trump's Russian Gas Sanction Strategy Blows Up Two Ways
Trump's meddling into the internal affairs of the Germany and the EU have blown up, as expected in this corner.
Not only did Trump fail to halt the Nord Stream 2 pipeline between Russia and Germany, Russia will build more of it.
Moreover, Trump angered Germany so much that Germany Calls for European Firewall Against U.S. Sanctions
Russia not Switzerland Will Get Money for Pipeline Completion
The bipartisan U.S. move initiated by Congress last week threatened sanctions against companies working on completing Nord Stream 2, Europe’s biggest energy-infrastructure project, which the U.S. and some European countries fear could give Russia some control over the continent’s energy supplies and boost revenues for an increasingly belligerent Kremlin.
The move prompted Swiss pipe-laying company Allseas Group S.A. to stop work on the $10 billion pipeline, just weeks from completion. The pipe would double direct gas shipments to Germany by Russian’s state-owned gas giant PAO Gazprom.
Despite announcement of the stoppage, Russian energy minister Alexander Novak told a state-owned press agency on Thursday that only 160 km, or the underwater part of the Nord Stream 2 pipeline, remained to be completed, work that would be finished within months by using Russian ships. Russian state media reported that Gazprom’s pipe-laying vessel Akademik Cherskiy, currently in the far east, would be brought to the Baltic to complete the pipeline.
Firewall Against Trump Needed
The U.S.’s move sparked outrage in Germany, prompting senior officials and politicians to call for a coordinated approach to protect the strategic interests of European Union members against future U.S. sanctions.
The dispute adds to strain in the western alliance since the Trump administration adopted a series of foreign-policy moves, including troop withdrawals, trade tariffs and the withdrawal from certain international agreements, without consulting with allies.
Some German officials say that fortifying Europe’s defenses against U.S. sanctions could require closer cooperation with Russia and China at a time when President Trump is pressuring EU allies to side with Washington in its trade, technology and geopolitical disputes with Beijing.
“Washington is treating the EU as an adversary. It is dealing the same way with Mexico, Canada, and with allies in Asia. This policy will provoke counter-reactions across the world,” this official said.
Treating Everyone as an Adversary
In Trump's pea-brain understanding of trade, there is a winner and a loser.
In reality, deals are reached when both parties believe they get something out of it.
Sanctions, bullying and threats don't help.
Trump wanted the EU to buy more US liquid Natural Gas (LNG). It would have been far more expensive for the EU so they resisted US sanctions.
But thanks to now bipartisan US sanctions, Russian contractors will get the money for completing the pipleline.
And the sanctions that Trump wanted, just might drive the EU to come up with a workable way around US sanctions.
Let's all hope so.
Wake-Up Slap in the Face
Trump can have his US first policy at all costs but then he should be prepared for EU first, Canada first, China first responses.
Germany's response should serve as a whopping big slap in the face wake-up call but don't count on it.
Trump's peabrain trade strategies and bullying of allies are encased in a head of concrete immune to political head slaps, even well-deserved ones.
Mike "Mish" Shedlock