How the Trump Administration is using trade threats to force the EU to comply with its foreign policy demands

The Joint Comprehensive Plan of Action (JCPOA) that blocked Iran from developing nuclear weapons was signed in 2015. The parties included the United States and Iran, along with Britain, China, France, Germany, and Russia.

In return, Iran got sanctions dropped that the US had imposed on them and had frozen Iranian funds held by the US released. As BBC News reports (Iran nuclear deal: Key details 06/11/2019):

Under the deal, Iran gained access to more than $100bn in assets frozen overseas, and was able to resume selling oil on international markets and using the global financial system for trade.

However, in May 2018, US President Donald Trump abandoned the landmark deal and in November that year, he reinstated sanctions targeting both Iran and states that trade with it.

Just before the Trump Administration announced it was unilaterally leaving the agreement, France's Emmanuel Macron, Germany's Angela Merkel, and Britain's then-Prime Minister Theresa May tried to persuade Trump to reconsider. Stephen Walt related at the time what happened (Europe Has No Clue How to Handle an American Bully Foreign Policy 05/02/2018):

But instead of getting tough with Trump and warning him that Europe would both stick to the deal and defy any subsequent U.S. effort to impose secondary sanctions on them, all three leaders chose to mollify and flatter Trump instead. Macron tried to persuade Trump to let him “mediate” some sort of a new deal between the various parties, only to say at the end of his visit that he believed Trump would nix the deal for “domestic reasons.” Next up was Merkel, who held a three-hour meeting with Trump and then told reporters that the current nuclear agreement was “not sufficient.” May reportedly then conferred with Macron and Merkel after their trips to Washington, and the three leaders sought to present a united front that was crafted to support the deal without alienating Trump.

The practical result of all this sucking up was disastrous. The top European powers had effectively caved in to the Trump administration’s view that the Iran deal is inadequate and has to be either replaced or supplemented by additional agreements. [my emphasis]

Walt counted the potential threat of tariffs on European steel and aluminum as one reason for the European failure in that instance. Another reason:

... the European response to Trump shows how successfully the United States has tamed and subordinated the former great powers that once dominated world politics. After 70-plus years of letting Uncle Sam run the show, European leaders can barely think in strategic terms, let alone act in a tough-minded fashion when they are dealing with the United States. It doesn’t help that Germany, the world’s fourth largest economy, is in a state of self-inflicted disarmament and incapable of influencing events beyond the eurozone itself.

In other words, European division, the lack of a common EU foreign policy, was showing itself once again. "When Europe’s leaders cannot summon the will to stand up to a tin-pot autocrat like Viktor Orban, expecting them to show some spine when dealing with Trump is a bridge too far."

Wolfgang Münchau's Eurointelligence this month points out how the German-led EU focus on exports has become another vulnerability that the Trump Administration is exploiting, also through the threat of tariffs. In How the US blackmails the EU 01/16/2020, he relates:

Donald Trump’s ambassador in Berlin denied the story furiously, but we have reason to believe that it is correct. The Trump administration issued a direct but private threat that it would slap a 25% tariff on EU cars unless the EU took action against Iran under the provisions of the 2015 nuclear agreement. This is exactly what happened this week.

We pay not [sic] credence to claims that the Germany, France and the UK wanted to trigger the dispute mechanism anyway, and that the threat by the Trump administration, if anything, complicated the decision. The whole notion of the EU triggering the mechanism in order to save the deal is a face-saving exercise. The EU acted the way it did because it had no choice.

He claims a similar US threat that was successful in the matter of suppliers to NordSstream 2 project. And he links this to the vulnerability in the eurozone that was so dramatically on display during the euro crisis:

It is the consequence of the EU’s incomplete model of integration. This was also the story of the eurozone crisis, when EU leaders persistently failed to act together in the interest of the eurozone. Back then the EU was lucky because the ECB was willing to take a supranational perspective and able to act on it. There is nothing like it in foreign and security policy. The European Commission has limited powers, for example in trade and competition policy, but the EU will need to employ different tools to defend itself from Trump or Xi.

He expands on the theme in The world has discovered how to blackmail Germany 01/17/2020: "This is what happens when trade surpluses are not merely occurring but they are an essential part of your overall economic strategy."