Trump's Russian Gas Sanction Strategy Blows Up Two Ways

Mish

Trump tried to stop a natural gas pipeline between Russia and the EU. His sanctions were a colossal failure.

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

Comments (38)
No. 1-19
SMF
SMF

The EU will use more fossil fuel and the greens are not complaining? What happened to Germany's solar power experiment?

Freebees2me
Freebees2me

So much for windmills, solar and other such fairytales....

It’s probably a good thing. It ties Germany and Russia together. Funny how Russia’s former satellites don’t seem eager to buy gas...

Russia can use the Euros to buy BMWs and Mercedes...

L.Ron.Hoover
L.Ron.Hoover

Trump called it: I'm sick of winning.

Maximus_Minimus
Maximus_Minimus

This is probably one of the stupidest moves in foreign policy. The last obstacle to NS2 was cleared when Denmark allowed it to cross her territorial waters. No doubt there was arm twisting behind the scene, but this last ditch episode is out in the open.

Gazprom could have just bought the pipeline-laying ship along with the crew, but why bother.

This is not America first, this is America alone policy.

Greggg
Greggg

Liquefied natural gas is going to be a hell of a lot more expensive than piped. It's not rocket science. The idea was a huge Magnitsky Act brain fart from the very beginning. European trade with Russia would be a great way to start the dismantlement of NATO.

michiganmoon
michiganmoon

#1 I bought stock in Gazprom a few years ago and have been very happy. I may buy more.

#2 The EU clearly doesn't see Russia as an enemy/threat if they continue to become more dependent on Russia for energy that they could shut off to cripple them. So can we stop pouring as much military resources and money into Europe?

Tengen
Tengen

This is the problem with Trump. He says he doesn't want to pursue globalism like his predecessors, but rather than actually opposing it he treats the whole concept like a buffet where he can pick and choose issues to his liking.

If you're going to loudly advocate for more easy money from the Fed and throw more funding at the MIC than ever before, you may as well go in on the rest too. At least that way we won't constantly alienate everyone, friends and foes alike. Well, almost everyone that is, Trump would never utter a harsh word to the great people of Israel and Saudi Arabia!

Eighthman
Eighthman

Sanction strategy won't blow up if it injures cowards who do nothing more than talk. Godspeed to the EU showing some courage, it's long overdue.

thimk
thimk

trump could promote more natural gas usage here stateside .We do waste a lot via flaring also . An old decommissioned nuc power plant has been recently retro ed to use nat gas here in west central Florida (i.e crystal river ).

Rick Weldon
Rick Weldon

But...I thought Trump was Putin’s Puppet and the EU was outraged by Russian aggression in the Ukraine. Guess I was all mixed up.

Tester2
Tester2

A big picture here is any wide tie-up of German industrial capability with Russian natural resources will be bad for the wider west. It's one scenario that can lead to a future war. As threatening, or more so, than China.

Sechel
Sechel

We're seeing the effect of two Russia policies out of the U.S. one very pro Russia and one anti-Russia. It's not only shambolic but its schizophrenic

Tester2
Tester2

Isn't Schroeder Chairman of Nord Steam AG and on board of Rosneft also?

Imagine if a US leader did similar on the board of a large Russian or Chinese company.

JonSellers
JonSellers

The Russia and Iran issues both boil down to trying to increase oil and natgas prices worldwide in order to try and make the US fracking industry profitable. It's really as simple as that. US banks and investors have over a trillion dollars tied up in one of the stupidest efforts in human history. The rest of us need to pay up to fix that, and Trump is determined to see that we do.

Tom from Michigan
Tom from Michigan

Nord Stream started in 2011, under Obama's watch. Trump went right after it when he became president, but to date his efforts have failed. Now he owns it?

BaronAsh
BaronAsh

"In Trump's pea-brain understanding of trade, there is a winner and a loser."

They have well articulated how that's not their view, but anyway.

"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."

That is a truly great sentence. Bravo!!

Of course, it's all a bit more complicated. Your inferred international model, or scenario, seems to assume there are no bad actors in the mix. Of course the US Empire is one, but so also is China, whose mercantilist posture has been quite damaging to many Western commercial and other concerns, and with whom Russia is a Eurasian symbiot. Obviously, Germany being dependent on Russian gas is a serious element in the geopolitical equation with far-reaching implications.

I happen to think the Russians and Germans are right in doing this - the more symbiosis the better. But the fact is that if there ever is a period of serious hostility between Eastern and Western Eurasia, then that dependency will put Germany and her allies in deep doo-doo. Ideally, this should not be a concern, but if we look at history, wars do break out quite often, so it is good to be prepared for them as much as we might prefer to believe that we have transcended such cruel and unnecessary stupidity.

abend237-04
abend237-04

We haven't had a national leader since Eisenhower. All since have been pretty boys or daddy's boys, or both, and all with their fingers in the political winds.

Technology is what we do best. Nuclear technology would have made Russia's gas worth less than pipeline construction cost by now, but we've allowed our luddite tree huggers to essentially outlaw it, ironically playing to Russia's only strength.

TimeToTest
TimeToTest

Trump is destroying the status quo.

Is that not what we wanted?

djhowls
djhowls

Trump is Russia friendly so he & Putin already agreed this. I doubt the USA is losing any sleep over it as they want to become self sufficient


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