Monday 8/6 Keith Johnson, Foreign Policy - The Nord Stream 2 gas pipeline: will it give Putin a chokehold on Europe’s economies?

Monday 8/6 Keith Johnson, Foreign Policy
The Nord Stream 2 gas pipeline: will it give Putin a chokehold on Europe’s economies?

 

It’s hard to know why Republicans in Congress ever thought President Donald Trump would, or could get Russian President Vladimir Putin to call off the NordStream 2 gas pipeline project, but one thing they have apparently learned about those secret talks in Helsinki is that he didn’t.

So Senators John Barasso and Cory Gardner are calling on Congress to take matters into its own hands, and in a way, out-Trump the Trumpster, when it comes to getting tough on a foreign competitor.  With the President cornering the market on punitive tariffs, the Senators have chosen other major stinkbomb of economic warfare as their chosen weapon: sanctions.

They propose mandatory American economic sanctions against any company that advances the NordStream 2 project, even though that will target many firms, from many countries once counted as friendly towards the United States.

Their proposed legislation would also make it easier for the US to export liquid natural gas, possibly to the very European countries who might be buying gas from the Nordstream 2 pipeline.  This undermines the senators’ former rationale for stopping Nordstream 2 — to prevent Russia from getting an energy chokehold on Europe — by suggesting the sanctions are not about geo-strategy at all, but natural gas market share.

President Trump reinforced that notion when he cited future gas sales as one of 2 reasons why he has postponed a new round of tariffs on imported automobiles.  The other promise negotiated with the European Union — to buy American soybeans to make up for tariff-driven losses in the China market — may be real, but European negotiator Claude Juncker said, Europe could only buy American gas if it built new terminals, and it would only start doing that as the US finished building its own new LNG terminals, several years down the road.

And then Juncker added the kicker.  European investment in LNG terminals requires that the price of US gas from tankers be competitive with Russian gas coming down the pipeline, which is a condition that not even Donald Trump may be able to meet.

Gas: it will keep you up at night.

READING ROOM:

Keith Johnson is Foreign Policy’s global geoeconomics correspondent. He has been at FP since 2013, after spending 15 years covering terrorism, energy, airlines, politics, foreign affairs, and the economy for the Wall Street Journal. He has reported from Europe, the Middle East, Africa, and Asia and, contrary to rumors, has absolutely no plans to resume his bullfighting career.

https://foreignpolicy.com/2018/07/25/trumps-trade-wars-are-bad-they-could-soon-get-a-lot-worse-eu-juncker-autos-tariffs/

https://foreignpolicy.com/2018/07/19/with-trump-going-soft-on-nord-stream-congress-readies-to-kill-the-pipeline-russia-helsinki/

https://foreignpolicy.com/2018/07/18/proposed-law-would-allow-u-s-to-sue-opec-for-manipulating-oil-market-nopec/

https://www.nytimes.com/2018/07/26/us/politics/trump-trade-european-union.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

https://www.nytimes.com/2018/07/26/world/europe/donald-trump-us-eu-trade.html?rref=collection%2Fsectioncollection%2Feurope&action=click&contentCollection=europe&region=stream&module=stream_unit&version=latest&contentPlacement=8&pgtype=sectionfront

https://www.nytimes.com/2018/07/25/us/politics/trump-europe-trade.html?action=click&module=RelatedCoverage&pgtype=Article&region=Footer

https://www.nytimes.com/2018/07/26/business/energy-environment/trump-europe-natural-gas-lng.html?rref=collection%2Fsectioncollection%2Feurope&action=click&contentCollection=europe&region=stream&module=stream_unit&version=latest&contentPlacement=9&pgtype=sectionfront

https://www.nytimes.com/2018/07/25/business/europe-ecb-wages-inflation.html?rref=collection%2Fsectioncollection%2Feurope&action=click&contentCollection=europe&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=sectionfront

https://www.washingtonpost.com/business/economy/trump-pushes-25-percent-auto-tariff-as-top-advisers-scramble-to-stop-him/2018/07/25/f7b9af04-8f8a-11e8-8322-b5482bf5e0f5_story.html?utm_term=.af49e6f0e403

https://www.washingtonpost.com/business/economy/in-tentative-deal-with-eu-trump-touts-parts-of-global-trade-deals-he-once-rejected/2018/07/26/92b066e8-910b-11e8-8322-b5482bf5e0f5_story.html?utm_term=.279a55bc37e5

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