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Why Europe is so angry over the big Russia sanctions bill

The GOP’s effort to tie Trump’s hands on Russia looks like it could be very costly.

EU chief executive Jean-Claude Juncker has threatened to take action against the US for the sanctions bill.
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Congress is close to passing a sanctions bill that would impose tougher measures on Russia for its meddling in the 2016 election while simultaneously restricting President Donald Trump’s ability to lift them. The measure is popular at home, but unpopular in Europe, where some of Washington’s closest allies are warning that it would harm their economies — and that they’d be willing to retaliate against the US in return.

The sanctions bill passed the House of Representatives Tuesday by a lopsided margin of 419-3, and the Senate could be voting on it as early as this week as well. The Trump administration has given mixed signals about whether it would sign the bill into law, but that may not matter. The Senate passed a similar piece of legislation earlier this summer by a margin of 98-2, so it’s very likely that the bill’s supporters will have veto-proof majorities in both chambers of Congress.

If the bill becomes law, the Republican Party will be taking its first concrete steps to constrain Trump’s unpredictable and politically risky behavior on Russia. The problem is that the European Union appears poised to punish the US for it.

Europe wouldn’t be taking those steps against the US because the leaders of countries like Germany and France oppose Russian sanctions per se, but because one specific new set of sanctions could wreak havoc on European energy companies.

Here’s why. The new bill would allow the US to sanction any company involved in the maintenance or development of Russia’s energy export pipelines. That could cripple the construction of a colossal natural gas pipeline between Russia and Germany known as Nord Stream 2, which is owned by Russian energy giant Gazprom but also has European investors.

The EU is not happy about the situation, to put it lightly.

“If our concerns are not taken into account sufficiently, we stand ready to act appropriately within a matter of days. ‘America First’ cannot mean that Europe's interests come last,” EU chief executive Jean-Claude Juncker warned the US on Wednesday.

The bill could spark trade skirmishes

It’s not empty rhetoric — there’s a number of actions the EU could take. According to Reuters, Europe could invoke special EU regulations to shield itself against the US’s policies, dispute the measure at the World Trade Organization, or even “impose outright bans on doing business with certain US companies.”

That last one is the serious one. The US and Europe have already drifted apart from each other quickly during the Trump era, and the two powers stand on the brink of trade wars over the Trump administration’s interest in protecting the American steel industry using tariffs. The passage of this bill would make some kind of trade tit-for-tat all the more likely, which could in turn damage both the US and European economies and drive even more of a wedge between them.

It should be noted though that many of the retaliatory measures that the EU could take would require all 28 members to sign off on it, and that’s not guaranteed. Eastern and Central European members of the EU are generally less fond of Nord Stream 2, which they believe will make Europe more dependent on Russian gas and thus make them more susceptible to Russian pressure.

Trump’s affection for Russia is forcing Congress to use quick and dirty fixes

What’s so striking about this particular US-European standoff is that the immediate source of it isn’t Trump, but Congress. Republican lawmakers are spearheading a policy that’s rubbing Europe the wrong way.

The underlying reason they’re doing it is because they don’t trust Trump on Russia. Between his inner circle’s ever-growing web of connections to Moscow, his persistent disinterest in holding Russia accountable for meddling in the 2016 election, and his willingness to make concessions to the Kremlin, Trump’s own party doesn’t trust him to handle Russia responsibly. And so they’re swiftly ramming a crude tool through Congress to ensure he doesn’t give Moscow a free pass. They’re also taking out insurance against future attacks on the party for rolling over for Russian president Vladimir Putin.

Lawmakers have tried to accommodate European concerns in their crafting of the bill and softened the sanctions language a bit to show that, but they really have one main priority here: Deprive Trump of his most prized bargaining chip for making a deal with Putin.

Russia abhors American sanctions, and the ones that affect its financial sector have had a crippling effect on its economy. Lifting sanctions would be crucial to any US-Russian deal designed to turn a new leaf in their beleaguered relationship. A new law imposing new sanctions that Trump would have a hard time lifting does the opposite — and that’s very much by design.