Yesterday, the Senate voted 98-2 to impose punitive sanctions on Russia and limit the President’s ability to remove them without Congressional review. That vote—the culmination of a lengthy process that saw the sanctions initially approved in the Senate, then held up in the House, and later rewritten after substantial objections—now clears the way for the bill to proceed to the President’s desk. If all goes as planned, President Trump is expected to grit his teeth and sign the bill; even in the unlikely event of a veto, the strong bipartisan support for the sanctions should be enough to override it into law anyway.
In other words, the sanctions are effectively a done deal, even if they are not official law just yet. Opponents of the bill can read the writing on the wall—and they are already making moves to retaliate. On Friday morning, Moscow pulled the trigger on what it hinted could be the first of many retaliatory measures. From the NYT:
Russia took its first steps on Friday to retaliate against proposed American sanctions for Moscow’s suspected meddling in the 2016 election, seizing two American diplomatic properties and ordering the United States Embassy to reduce staff by September. […]
Referring to the vote by Congress to toughen the sanctions, the Russian Foreign Ministry said in a statement: “This yet again attests to the extreme aggressiveness of the United States when it comes to international affairs.”
Moscow’s reaction here is predictable enough; the Russians have been threatening a version of this move ever since the Obama administration kicked out Russian diplomats and seized Russian diplomatic compounds back in December. With the Trump administration unable or unwilling to release those facilities, and a new slate of sanctions on the way, the time was clearly ripe for the Russians to express their displeasure with Washington.
But it’s not just the Russians who are upset with the sanctions. As we wrote last month, Germany and Austria have fumed that the sanctions threaten European energy interests, by targeting (among other European-Russian ventures) the Gazprom co-financed Nord Stream 2 pipeline between Russia and Germany. For the bill’s European enemies—among them the Netherlands and France, who have been quieter in their opposition than Germany—the sanctions are a thinly veiled excuse to promote American LNG exports and meddle in the European energy market. And top German business leaders are already mulling retaliation, as Reuters reports:
The head of the German Committee on East European Economic Relations said potential damage to European energy sector companies with business interests in Russia could justify counter-sanctions.
“It’s the last thing we want, but we must keep the option open,” Michael Harms told a news conference in Berlin.
“The sanctions they want against pipeline projects seem designed to boost U.S. energy exports to Europe, create U.S. jobs and strengthen U.S. foreign policy.”
The European consensus on Russia sanctions has always been somewhat fragile, resting on the tacit understanding that any sanctions stricter than the existing ones would not hold. By unilaterally imposing tough new sanctions that could hobble European business interests, Congress paradoxically seems more likely to unite Europeans against Washington than against Moscow—especially given the terrible image President Trump has among European electorates.
Ironically, American attempts to hurt Nord Stream 2 could also give it new life, turning the controversial pipeline into a cause célèbre among a public that only half-understands the bigger picture surrounding the issue. Angela Merkel in particular may see a golden opportunity before the German election to rally business to her side by embracing Nord Stream 2, railing against Trump, and fighting Washington’s interference in the project. She already decried an earlier version of the sanctions bill, after all, and has taken a hard line against outside countries interfering in Nord Stream 2.
It is still too soon to tell how serious the U.S.-European split over sanctions will be, or what measures the Europeans might take in retaliation. European Commission President Jean-Claude Juncker said recently that he hoped to resolve the dispute through diplomatic channels, but that the EU would take unilateral action “within a matter of days” if necessary. However this shakes out, though, the whole episode is a powerful illustration of the law of unintended consequences. The new sanctions bill may well achieve Congress’s goals of imposing costs on Moscow and limiting Trump’s flexibility on Russia. Still, it perversely could have given Putin some common ground with Europeans, and could lead to bigger headaches down the road than anyone bargained for.