June 28, 2018
Trump now gunning for Nord Stream 2
As if the tariffs on steel and aluminium - and soon cars - were not enough, the US administration is now preparing sanctions against five European companies involved in the Nord Stream 2 gas pipeline project. Those sanctions previously had the status of a rumour. But FAZ reports this morning that it received confirmation from a senior US official, at the World Gas Conference in Washington, that the administration is formally considering an application to impose such sanctions. There are two German companies involved, Wintershall und Uniper, as well as OMV from Austria, Engie from France and Royal Dutch Shell. Together they fund 50% of the project. Gazprom funds the other 50%.
FAZ notes that Uniper, one of the German companies, would be particularly hard-hit. The company is a big player in the US coal trade. The company's CEO is quoted as saying that he continues to believe in the necessity of the Nord Stream 2 pipeline to secure gas supplies for the EU. It remains to be seen whether the companies will back off from the project once the sanctions are actually imposed.
Donald Tusk said the EU should prepared for the worst as a result of the new policies of the US administration. We think this is wise, especially since the hardening in the US position is not attributable to President Donald Trump alone. The FT quotes an EU official as saying that the EU was concerned that Trump's decisions are not just incidents, but a pattern. We think this has been evident for some time.