Washington prepares to sanction our closest allies
The Washington political establishment appears to be ready to do something that can't be undone. Once you sanction your allies either they fold, or they stop being allies.
This isn’t a bluff: it is what the game theorist and nuclear strategist Thomas Schelling calls a tripwire. When one state is worried that another state will not take its credibility seriously, it may create a situation that narrows its own options in the future.
...This means that if the United States took the advice of Bloomberg Opinion, it would effectively be declaring diplomatic war on its three most important European allies, sanctioning senior European officials for acting in their official capacity to maintain an international agreement that the United States itself negotiated and Iran has not violated. Europe has deliberately structured INSTEX to make it difficult to back down, meaning that there would be widespread fallout from such a declaration of war.
The recent Warsaw Conference is a good example. Vice President Mike Pence slammed Britain, France and Germany in blunt language for busting US sanctions against Iran, while France and Germany didn't even bother send their top diplomats.
This alone is an extremely significant development, but it is hardly an isolated event.
Washington is also preparing to sanction major European companies over an officially sanctioned Russian pipeline.
Speaking at the energy conference in the Belgian capital, Nicole Gibson, deputy director of the U.S. State Department’s office for Europe, warned that if European companies resume laying pipe later this year they “risk significant sanctions.”
Declining to go into any details about the threatened sanctions, Gibson said Washington doesn’t accept that Nord Stream 2 is a done deal...Her high-profile warning, upping the political stakes, comes two months after Richard Grenell, the U.S. envoy to Germany, sent letters to dozens of European construction and energy companies saying they face sanctions if they resume in the spring the laying of NS2’s concrete-coated steel pipes.
Germany has dug in their heels on this pipeline. 818 kilometers of pipes – precisely one-third of the gas pipeline’s total length – have been laid in the Baltic Sea.
As if that wasn't enough, the Trump Administration is going to allow lawsuits against European firms that do business in Cuba.
yet again, the United States has decided to tell other countries where they can do business.
I don't want to give the wrong impression - we are also going after non-European allies.
Strategically important NATO ally, Turkey, may be about to be sanctioned.
"Turkey's acquisition of the Russian S-400 air-defense system will have grave consequences for the U.S. defense relationship with Turkey," U.S. Pentagon spokesman Nick Pahon said Monday in a statement.
...Analysts warn the consequences for Ankara, however, could be far-reaching. "If this purchase would go through, even beyond these military aspects, the escalation in Turkish-U.S. tensions would be significant in terms of affecting Turkey's political risk, for the economy," said Sinan Ulgen head of the Istanbul based think tank Edam.
Turkey is also joined with INSTEX (Instrument In Support of Trade Exchanges), the body set up by the European Union that process payments to Iran.
Trump has already fired a shot across the bow of Turkey by removing them from a trade agreement.
The simple fact is that unilateral sanction almost never work. Russia and Iran are not going to fold. We've already pushed China, Iraq and Pakistan into working with them.
So the chances of secondary sanctions forcing our allies to obey are slim. Thus this strategy is based on arrogance and a failure to "read the room".
One possible consequence of this hubris is an End of Dollar Hegemony.