More sanctions support US interests but not activity

Subject

US sanctions.

Significance

The US government views the new Nord Stream 2 gas pipeline, running from Russia to Germany under the Baltic Sea, as increasing European dependence on Russian fuels when the Russian government is reasserting its influence in Eastern and Central Europe. The US administration has imposed extraterritorial sanctions against corporations constructing the pipeline. This may simply be a tactic to encourage more European purchases of US natural gas, but it is also consistent with the US administration’s mercantilist attitude towards trade.

Impacts

• Nord Stream 2 sanctions will hurt some European firms, akin to the effect of US sanctions against European firms still operating in Iran.
• No evidence shows that the US policy is improving firms’ sales, which may discourage firms from currying favour with the administration.
• The US corruption probe into Airbus may boost Boeing and Lockheed Martin in the US market and make it harder for China’s COMAC to enter.