Trump Threatens Nord Stream 2 With Sanctions
Mike (Mish) Shedlock | Jun 29, 2018 06:16AM ET
Trump's vise on the EU started with steel, progressed to cars, then to Iran, and now to a gas pipeline vital to the EU.
The story of the day, not discussed in mainstream media, involves Nord Stream 2, a gas pipeline between Russia and the EU. The feature image is from Gazprom (MCX:GAZP).
Gazprom says "The new pipeline, similar to the one in operation, will establish a direct link between Gazprom and the European consumers. It will also ensure a highly reliable supply of Russian gas to Europe."
Some suggest the EU is unwise to depend on Russia. That is nonsense. Why?
Free trade stops wars!
Regardless, it is the EU's decision to make, not Trump's, and the deal is already underway.
TASS, the Russian news agency reports "Gazprom, Partners Invest €4.8 Billion Nord Stream 2 Construction"
Believe that? Why not? There is no dispute from the EU.
My point is the investment.
Russia’s gas producer Gazprom and its Nord Stream 2 partners have invested a total of 4.8 bln euro in the project on natural gas pipeline construction as of the end of June, Chief Financial Officer of Nord Stream 2 AG, the operator of the pipeline construction, Paul Corcoran told journalists on Thursday.
"We have received 96% of the pipes, we have concrete coated 55% of those pipes and we mobilized vessels for the pipelines. So we are quite well prepared on track and on time for the project," CFO added.
The Nord Stream 2 pipeline is expected to come into service at the end of 2019.
Stop It All Says Trump
Eurointelligence reports "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 (LON:RDSa). 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.
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Twilight Zone
Trump's Iran sanctions are absurd. His Nord Stream 2 demands are so far beyond absurd as to be in the Twilight Zone.
Does Trump have a yes or no vote on any and every trade agreement in the world?
It appears so.
The EU and all the countries that border the pipeline agreed to this deal. They invested heavily in it. Construction is underway.
What's Next?
This is so damn absurd, it's logical to conclude there is no way the EU will back down.
However, logic and reality can be quite different things. Trump is proof enough.
Either way, the problem is "what's next?"
History suggests that when trade stops, war soon follows.
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