Trump’s new conflict with Europe
In a joint statement, the foreign ministers of France, Britain and Germany — the three Western European signatories to the nuclear accord with Tehran — said a Paris-registered “special purpose vehicle” would enable European companies to conduct business deals with Iran by bypassing the U.S. financial system and thus avoiding the risk of triggering American retaliation.
“To avoid real money being traded between Iran and Europe that the United States could use as evidence to justify sanctions, the corporation is expected to operate essentially as a clearinghouse for credit points,” explained my colleague Rick Noack. “If an Iranian company trades with a European counterpart, it can use those credits to pay for purchased goods.”
The project may have only limited impact, as a statement from the State Department suggested. The Europeans intend the vehicle to be used mainly to trade in food, medicine and medical devices, not more lucrative goods — though Iranian officials indicated that they hoped it could be expanded in the future.
But experts say the move is consequential for its symbolism alone. Western European leaders desperately tried to dissuade President Trump from pulling out of the nuclear deal, which was the product of years of complex diplomacy and which even U.S. intelligence sources believe has effectively curbed Iran’s nuclear program. But Trump took no heed, withdrawing from the accord and reinstating various layers of sanctions on Tehran.
Now, Washington’s closest partners are building mechanisms of defense against it. “This is really the first instance in which Europe is trying to stand up to the coercive economic power the U.S. is wielding,” Esfandyar Batmanghelidj, the founder of the Europe-Iran Forum, said in a phone call with reporters hosted by the European Leadership Network, a think tank in London.
On the same phone call, Ellie Geranmayeh, a senior fellow at the European Council on Foreign Relations, pointed to the emergence of “dedicated teams in European ministries” that are developing tactics to dent the Trump administration’s “overuse and overreach” of sanctions as a policy tool.
“No one is under the illusion that this is a silver bullet,” Geranmayeh said, referring to the new joint German-British-French corporate entity, “but it’s the beginning of . . . a more resilient response.”
Sanctions experts Henry Farrell and Abraham Newman argued in The Post’s Monkey Cage blog that the moves are an overdue reaction to Washington’s hubris. “For a long time, the United States has been able to weaponize interdependence for its own security purposes without much in the way of effective challenge,” they wrote, referring to the United States' unquestioned control of the global financial system.
But that could change. “Key American officials have worried in the past that if the United States is not careful, it might undermine this architecture by taking aggressive steps that would encourage states and other entities to create their own networks,” Farrell and Newman added.
On Thursday, German Foreign Minister Heiko Maas emphasized Europe’s willingness to break with the United States. “This step makes it clear that we are also going our way in a determined and united way within the European Union — even if others take a different view,” he said from the sidelines of ministerial meetings in Romania.
The Trump administration certainly has a different view. It has aggressively lobbied its European counterparts to help squeeze Tehran, with mixed success at best. At odds with the major powers of Western Europe, it turned east, hoping to cultivate more nationalist and illiberal allies in Hungary and Poland.
Later this month, Secretary of State Mike Pompeo will attend a summit in Warsaw focused on the Middle East that was initially billed as a conference on countering Tehran’s influence in the Middle East. Pompeo had hoped to lead an anti-Iran charge, but vociferous pushback from other participants forced the Trump administration to shift its tone.
“This is not an anti-Iran meeting or coalition-building exercise,” a senior U.S. official told journalists in a telephone briefing this week.
The divisions over Iran are exacerbating the deeper rift between Trump and Washington’s closest friends across the pond. Many European officials were shocked by a speech Pompeo delivered in Brussels at the end of last year, in which he celebrated the continent’s ascendant right-wing nationalist movements and attacked the multilateralism that has been the bedrock of European peace and prosperity for decades.
In an op-ed for the Financial Times, Constanze Stelzenmüller of the Brookings Institution said the Trump administration has embraced the thesis of Israeli writer Yoram Hazony, whose recent book casts the European Union as a vehicle for German imperialism, bent on “delegitimizing” other European nation-states.
Hazony — and the White House, by extension — is “spectacularly misinformed about the status of nation states in Europe or Germany’s power over them and the EU,” Stelzenmüller wrote. Besides, she asked, “to what imaginary golden age of nationalism exactly should Europe’s clock be turned back? 1989? 1945? 1918?”
It’s not clear how Pompeo might answer, but the same also goes for many of the right-wing populists he lauded. The chaotic mess of Brexit — still championed by Trump and his allies — has softened the nationalist platforms of some of Europe’s most hard-bitten Euroskeptics.
“Even successful populists and nationalists like Matteo Salvini and Luigi Di Maio in Italy, Victor Orban in Hungary, Jaroslaw Kaczynski in Poland and the Alternative for Deutschland have dropped the idea of leaving the euro or the European Union and are instead working to alter the functioning of the bloc from within,” noted Steven Erlanger of the New York Times.
The months ahead will see a crucial test of Trumpian politics on the continent. Far-right political parties will hope for big gains in European parliamentary elections in May. But, as key leaders did last week at the World Economic Forum in Davos, European liberals and centrists will only grow louder in their attacks on Trump’s disruptive brand of nationalism. The special accommodation of Iran may turn out to have been their opening salvo.