The U.S. Sanctions Russia, Europe Says 'Ouch!'

The Russia sanctions bill passed by the U.S. Senate threatens to deepen the rift between the U.S. and Europe that has emerged since Donald Trump won the presidency. Though in the U.S., the bill is only discussed in a domestic political context, German and Austrian leaders see certain provisions as an attempt to give an unfair advantage to U.S. energy exports.

Prior to the first three rounds of sanctions, which were linked to Kremlin-backed aggression in Ukraine in 2014, the U.S. made a point of negotiating with its European allies. The European Union timed the roll-out of its own sanctions to coincide with U.S. actions. Indeed, it's the European trade and finance restrictions that have hurt Russia the most; Europe is the biggest market for Russia's energy exports, while Russia never had much of a trade relationship with the U.S. The loss of direct and portfolio investment from Europe and the demise of the South Stream natural gas pipeline plan were the most painful effects of the sanctions. Today, those European restrictions are the primary reason why the Kremlin wants sanctions lifted.