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Nord Stream 2 Sanctions Won’t Endanger Transatlantic Cooperation on China

German Chancellor Angela Merkel speaks during a joint video press conference with French President Emmanuel Macron at the end of the European summit in Brussels, Belgium July 21, 2020. (John Thys/Pool via Reuters)

Secretary of State Mike Pompeo was in London yesterday to meet with British officials about cooperation on China policy. In recent weeks, the U.K. has grown more hawkish on its responses to recent moves by Beijing, taking a series of actions that indicate a marked departure from the “Golden Era” of Sino–British relations. British public opinion toward Beijing has soured, too: The FT reports that a recent poll found that 83 percent of respondents distrust China. In this sense, the special relationship seems poised to play a significant role in leading the West’s response to China going forward, and likeminded countries will follow.

However, there remains a significant caveat to the trend of Western countries approaching China with more skepticism. While Australia and Canada, which have faced Chinese influence campaigns and hostage diplomacy, respectively, have already had a rude awakening about Beijing, German chancellor Angela Merkel seems reluctant to act on Chinese human rights abuses and the country’s coronavirus-era assertiveness. Contrast that with other Western European countries: Italy has followed the U.K.’s lead in cracking down on Huawei, and on Monday, France criticized the Chinese Communist Party’s treatment of the Uighurs, to name some recent moves. Merkel’s Germany, though, has not budged on China, neglecting to speak out about the Hong Kong security law and recent evidence on the Uighur concentration camps.

These differences raise an important question: Can the U.S. and its allies craft a united response to Beijing’s actions? An article on Pompeo’s London visit considers a few sticking points. From the Nikkei Asian Review:

American policy toward Europe may prove self-defeating on this front. The U.S. State Department signaled last week that it is willing to impose sanctions on individuals and companies investing in the Russia-to-Germany Nord Stream 2 gas pipeline project.

If Washington imposes sanctions on a German company, “you’re impacting … German jobs potentially, and you turn what could be a purely international political matter into something where the German government now has to deal with things on the domestic front, too,” said Brian O’Toole, a former U.S. Treasury Department official who worked with sanctions. “So it makes the German government angrier.”

Washington is also at odds with France over taxes and trade, recently slapping 25% tariffs on many French goods in response to a digital tax imposed by Paris that would hit American tech giants.

Meanwhile, President Donald Trump’s decision to withdraw American troops from Germany is forcing a rethink of the U.S.-European deterrence posture toward Russia. Washington argues that Russia is a lesser threat than China, but many in Europe worry more about the threat right next door.

These concerns would make sense if the European countries that have grown more skeptical of China’s intentions were acting based on U.S. pressure alone. This seems unlikely — most of the tougher measures enacted by these governments coincide with notable shifts in public opinion and growing awareness of the Chinese Communist Party’s influence operations on the continent, especially in light of the overreach by Chinese diplomats in the early days of the pandemic.

The new sanctions on entities involved in the Nord Stream 2 project will undoubtedly cause some additional friction with Germany, but perhaps not much more friction than was caused by the Trump administration’s withdrawal from the Iran nuclear accord and the Paris Agreement, and the president’s comments on Article 5 of the North Atlantic Treaty. But it’s doubtful that the Nord Stream spat would be the deciding factor in Germany’s failure to stand up to China.

Germany’s continued reluctance to act on China’s transgressions results more from a deeply held hypothesis about trade and political liberalization than anything else. German economy minister Peter Altmeier recently told a Politico Europe reporter, “I have always been convinced and I still believe that change can be achieved through trade.” This perspective has entrenched itself at the highest levels of Merkel’s government, but German MPs, including prominent members of her party, have called for a stronger response. If Germany fails to implement an adequate China policy, the blame rests with Merkel, not the sanctions.

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