General objectives that guide the activities and relationships of one state in its interactions with other states.

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This Is How Europe Can Block Trump Actions

in Donald Trump/News by

The US exited Iran deal, and the sanctions they will impose on this Middle East country could harm European companies. But EU could try and use a tool that worked well for them in the 90s in a situation similar to this.

America’s exit from Iran deal wasn’t graceful, and President Trump threatened that he would use the sanctions to make Europe follow him. So, Trump didn’t only violate a multilateral agreement, which the rest of the signatories intend to honor, his administration also wants to impact European business in that country. POTUS also mentioned that he plans to impose harmful trade tariffs on EU if they fail to oblige. If this happens, a trade war is imminent. Also, Europe will be between a rock and a hard place in their attempt to retain its sovereignty while not further damaging trans-Atlantic alliance in the process.

After Trump announced that America exited Iran deal, his administration said that the set of sanctioning measures would be imposed in Iran, and that same awaits any countries that continue to trade with Iran. The US ambassador in Germany tweeted that German companies should cease all trade affairs with Iran immediately.

Source: www.dw.com

Upon these threats Germany’s economy minister, Peter Altmaier said that German government was “ready to talk to all the companies concerned about what we can do to minimize the negative consequences of the U.S. withdrawal.” French Finance Minister Bruno Le Maire was harsher in his response by saying: “The international reach of U.S. sanctions makes the U.S. the economic policeman of the planet and that is not acceptable.” At the moment of writing of this article, Iran and EU are working on a plan that will allow Iran to sell Oil and Gas and protect European companies at the same time.

After Trump removed the US from the deal, there are two paths that the Old Continent can take. The first one is to accept the US leaving the agreement but to work on economic issues that will arise. Europe needs to make sure that their companies operating in Iran won’t be penalized by America.

The second path would be to be aggressive towards the US and to reinstate the ‘blocking regulation’ which hasn’t been used in more than 20 years. The primary goal of this regulation is to ‘abolish restrictions on international trade.’ The last time it was imposed was in 1996 when President Bill Clinton turned Iran and Libya Sanctions Act and the Cuban Liberty and Democratic Solidarity Act to law. At the time this was against EU interests, and Europe acted on behalf of its security and economy.

Source: www.vox.com

This act was called Council Regulation N0. 2271 and its goal was to protect EU companies against the “effects of the extra-territorial application of legislation adopted by a third country.” The regulation also contained ‘clawback provision’ which essentially allows EU company to sue America on European courts in a case that their business is damaged on purpose by the US actions. In this case, if the US losses on the court, every EU company could get a refund through a seizure of the US entity on EU soil against which they had a grievance.

Source: cnn.com

But if the Trump sanctions go from Iran onto Europe, most EU companies would stop to trade with Iran. The losses they would have that way are far smaller than those that would occur if they ended their work with America. Luckily for all parties involved, Trump might be willing to negotiate and to soften his hard stance. We draw this conclusion from his recent tweet in which he stated that he’s ready to sit at the table with Chinese president Xi Jinping in order to loosen the sanctions on ZTE. This company was penalized by the US administration due to steady sales to North Korea and Iran. If Trump can find common ground with Chinese, there’s no reason he can’t get along with EU countries.

Source: foreignpolicy.com



As one of the founders of foreignpolicyi.org Knjaz Milos tries to bring all the latest news regarding politics. He loves history and is passionate about writing. contact: carsoidoffice[at]gmail.com

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