If Trump is intentionally trying to piss the Europeans off, he’s doing a good job of it. From Tom Luongo at tomluongo.me:
The one thing I never thought I’d say is that Donald Trump is consistent, and yet on the subject of the Nordstream 2 pipeline he has been.
No single project has caused more wailing and gnashing of teeth than Nordstream 2. And since Nordstream 2 is simply the substitute for South Stream, which was supposed to come across the Black Sea into Bulgaria and then feed eastern Europe, this U.S. opposition to another Russian pipeline spans multiple administrations.
So, this is policy that goes far beyond simple 2020 electoral politics, Trump trying to look tough on the Russians, or his misguided Energy Dominance policy.
With Trump rescinding the sanctions exemption for Nordstream 2 he now has declared open war against Europe, specifically Germany over this project.
But here’s the thing, I think Trump is doing this for updated reasons that fit a different agenda than why the U.S. opposed Nordstream 2 previously, because he knows he can’t stop the pipeline now. All he can do is further alienate Germany, who he has targeted as the main problem in Europe.
Before I go any further, though, I think a little history lesson is in order.
U.S. opposition to Nordstream 2 is deeply ingrained on all sides of the political aisle in D.C. From Republicans still fighting the cold war to Democrats having deep ties to Ukrainian gas transit there are a multitude of reasons why Nordstream 2 is verboten in D.C.
On the other hand, Europe’s relationship with Nordstream 2 is, in a word, complicated.
Russian President Vladimir Putin scuttled South Stream back in late 2014 because the EU changed its pipeline rules during its development after the contracts were in place.
Most of that was U.S. pressure, but some of that was Germany’s Angela Merkel working with then-President Barack Obama to create the worst possible scenario for Gazprom – a pipeline that wasn’t profitable.
Merkel backed Obama’s play in Ukraine in 2014 as a power move to control prices for Russian gas into Europe, putting Soviet-era pipelines under EU gas directive jurisdiction.
The EU was always going to use Ukrainian gas transit as leverage over Putin to drive gas prices below Gazprom’s cost thinking they had no other options.
Putin famously pivoted to China, singing the mega-deal for Power of Siberia in retaliation to that. Since Putin had already brought Crimea in from the cold war and tacitly backed the breakaway of the Donbass Merkel was now the one on her back foot.
At the same time, to salvage the work done on South Stream to that point, Putin cut a deal with Turkish President Recep Tayyip Erdogan to replace South Stream’s volumes to eastern Europe with Turkstream’s to Turkey.
The plans for Turkstream include multiple trains into eastern Europe with countries like Serbia, Hungary and the Czech Republic itching for that gas.
Russia’s options were manifest and Putin deftly outmaneuvered Merkel and Obama. These events forced Merkel’s hand after she stupidly caved to the Greens over ending Germany’s use of nuclear power and now she needed Nordstream 2.
And so Nordstream 2 became a big geopolitical football because Merkel saw, as well, the opportunity to bring the recalcitrant Poles and Baltics under her control as well, solidifying long-term EU plans to engulf all of Euope to Russia’s borders.
Nordstream 2 would nominally replace Ukrainian gas supplies and she could set Germany up to be the gas transit hub, supporting political power emanating from Brussels.
This would give her leverage over Poland, who are trapped between their hatred of the Russians and their unwillingness, rightfully, to submit to Germany.
But Merkel, ever the deft three-faced keeper of the status quo, worked with Putin to secure gas flows through Ukraine for another five years, allaying the worst of Poland’s fears while they have courted Trump to bring in over-priced U.S. LNG.
But from the beginning, Nordstream 2 becomes a different animal geopolitically the moment Trump comes to power. Because Trump is opposed to the EU’s consolidating power over Europe while also sucking the U.S. dry on trade and defense.
He’s made this abundantly clear.
Since the beginning of the year Trump has ratcheted up the pressure on both China and the EU. And the only way that makes any sense is if you are willing to see them as allies in undermining the U.S.’s global position.
This isn’t to say that the U.S.’s global position should remain as it is. Far be it for me, of all people, to argue that. But with the insanity of the COVID-19 fake pandemic, the World Economic Forum’s plans for The Great Reset, and the fomenting a cultural revolution in the U.S. the stakes are now as high as they’ve ever been.
The Davos Crowd is making their big move to consolidate power in Europe. Trump is working with Boris Johnson in the U.K. to oppose that. That’s the simplified version of the chess board.
And this is why I think Trump refuses to give up on stopping Nordstream 2. He’s seen the depths to which The Davos Crowd will go to implement this radical change and he’s forcing the moment to its crisis, as T.S. Eliot put it.
He’s making the choice very clear for Merkel and company. If you want Nordstream 2, suffer the consequences of having to do business without the U.S.
This isn’t about Russia anymore, at all. It’s about Germany and the future of the U.S. If Trump loses in November all of the work done to slow down this push for transnational technocratic oligarchy will end.
If he wins then the current policy sticks, the EU is forced to deal with the U.S. retrenching completely, pulling back on commitments to Europe while divorcing U.S. trade from China.
He may actually be courting lower U.S. dollar flow the world over and forcing Europe into real economic crisis by early next year.
This sanctions policy against Nordstream 2 is consistent with his ‘snap’ decision to pull troops out of Germany, his unilateral abrogation of both the INF treaty and the JCPOA while pressuring NATO to do more.
Merkel, meanwhile, is trying to run out the clock on both Trump and Brexit, as I talked about in my podcast from last week. She’s hoping that Trump will be defeated which will set things back to the way they were before him, force U.K. Prime Minister Boris Johnson to knuckle under in trade deal talks and establish the primacy of the EU as the center of Western power.
Putin, for his part, doesn’t care who he deals with in the long run. He can’t afford to. He has to play the cards on the table in front of him with the people in power, since Russia is still a minor player but with big potential.
For Trump, I believe he sees Nordstream 2 as the perfect wedge issue to break open the stalemate over NATO and cut Germany loose or bring Merkel to heel.
This next round of sanctions will target the companies involved directly in the pipeline. Germany can’t afford not to finish Nordstream 2. So, we are headed for an epic clash here.
Trump and Merkel hate each other, with good reason. And while I have mixed feelings about the way Trump does business, I know Angela Merkel is the key to the EU’s future.
I mentioned in a recent article that I feel Trump is a guy with almost nothing left to lose. If he’s going out he’s going out with a bang. Arrest Ghislaine Maxwell, sanction China and threaten war over Hong Kong, ramp up dollar diplomacy on Europe.
He knows that hybrid war is the only war the U.S. can ‘win’ decisively given the relative dominance of the U.S. dollar today.
While the end of dollar hegemony is in sight, do not underestimate how much damage can be done to the status quo while Trump is in power. That status quo isn’t good for anyone except those who currently want that power back.