Russia woos a Europe feuding with US over tariffs, Iran

The scene at last week's St. Petersburg International Economic Forum [SPIEF], Russia's annual economic showcase, would have been unimaginable just a couple years ago.

There sat a beaming Vladimir Putin on the keynote panel, flanked by French President Emmanuel Macron, Japanese Prime Minister Shinzo Abe, International Monetary Fund Managing Director Christine Lagarde, and Chinese Vice President Wang Qishan. Out in the corridor lurked US Ambassador Jon Huntsman, who had agreed to speak but later declined due to the presence of Russian oligarch Viktor Vekselberg, recently sanctioned by the US Treasury Department, at the meeting.

Still, Mr. Huntsman had a message for SPIEF's nearly 15,000 business participants, including 40 major investment funds from 20 countries: “Dialogue is our only path to progress,” he told journalists.

It's a big reversal from a couple of years ago, when the State Department advised US companies not to attend at all to avoid “reputational damage” from dealing with Russia. It's all the more surprising since the number of Kremlin-linked scandals have only multiplied since then, including the Olympic doping controversy and allegations that Russia was behind the nerve-agent poisoning of a former Russian double agent in England. Indeed, Mr. Putin's heavyweight panel discussion came just one day after a Dutch-led team of investigators for the first time explicitly blamed Russia for the shootdown of Malaysian airliner MH17 over eastern Ukraine four years ago.

The main reason for the apparent turnaround in Russian fortunes might be summarized in two words: Donald Trump.

The US president has behaved in ways so out of keeping with precedent, trashing long-term understandings, that an exasperated Donald Tusk, president of the European Council, declared recently that “with friends like this, we don't need enemies.”

‘In the same boat as the Europeans’

Mr. Trump has slapped tariffs on steel and aluminum exports from the European Union, raising the specter of a trade war, and warned that US sanctions might be imposed on European companies participating in the Russian-German Nord Stream II gas pipeline. Most seriously, earlier this month he unilaterally pulled the United States out of the six-nation Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), and threatened Iran with total economic isolation. That will require European companies, including giants like Total, Siemens, and Airbus, to abandon billions of dollars worth of contracts with Iran, or face retaliation in the form of “secondary sanctions” from the US.

The Europeans have so far been defiant, vowing to uphold the JCPOA and maintain business ties with Iran. That helps explain the flurry of diplomatic activity, with German Chancellor Angela Merkel coming to meet Putin in the Russian resort of Sochi two weeks ago, and Mr. Macron joining him on the panel at SPIEF last week. Russia, which also staunchly supports the JCPOA, is potentially an important player in Europe again.

“There is a palpable sense in Moscow that this situation represents a critical window of opportunity for Russia. We didn't think we could ever break the stranglehold of united Western sanctions, but things can change,” says Sergei Strokan, foreign affairs columnist for the Moscow business daily Kommersant. “Suddenly we are in the same boat as the Europeans.

“The emergence of Trump has created a new reality. Putin's message to the Europeans has been ‘let's make a new deal.’ For them it's not just about business contracts, it's about European sovereignty. They may not like Russia, but they no longer want to have their Russia policy dictated by Washington. A new deal looks quite possible.”

It's a seductive possibility that Macron explicitly held out to Putin. “We all know your taste for judo, dear Vladimir,” he said on the SPIEF stage. “It is based on a mastery of one's own strength and respect for one's opponent. Let us emulate those principles in the international arena. Let us play a cooperative game, a joint game.”

Too big a change?

But many Russian analysts warn it's too soon to say whether the frantic diplomacy of May is leading anywhere. For one thing, they say, European politicians may just be learning to play Trump's game of behaving unpredictably and brandishing threats. At the end of the day, the seven-decade-old Atlantic alliance cannot be so easily shattered, and Europe's economic ties to the US are far more important than anything it has with Iran or Russia.

“It was a bit surreal watching Macron making nice with Putin, saying ‘dear Vladimir’ this and that. But talk is one thing, action another,” says Fyodor Lukyanov, editor of Russia in Global Affairs, a leading Moscow foreign policy journal. “But I kept wondering, how can he do that when France has signed on to the worst interpretations of things like MH17 and the Skripal poisoning? How can you turn around and call for normalizing relations, just like that?

“Europeans are very confused right now. Much depends on their ability to stick to the idea they have expressed, that the US measures against Iran are illegal. And even if they do, it doesn't mean they must reach some new accommodation with Russia. There is a huge array of reasons why it would be very hard for Europe to disconnect from the US.”

One of those reasons, Mr. Lukyanov says, is the historical animosity between Europe and Russia. For hundreds of years, Russia has been seen as a giant menace, and an alien presence, occupying the bulk of Eurasia.

“These feelings of viewing Russia as a murky enemy in the east are very deep-rooted. This will not evaporate overnight, any more than Europe's long standing alliance with the US will. Facing Russia alone is probably not something they would want to contemplate,” he says.

Yet Trump has already changed realities, in ways that will be playing out for a long time to come, says Mr. Strokan.

“Russian diplomacy and the public mind alike are already grappling with the stunning shift that is taking place,” he says. “It's no longer appropriate to talk about ‘Russia and the West’ as a single topic, as we did until practically yesterday. Now we must specify ‘Russia and the US,’ or ‘Russia and Europe.’ It's a whole new world already.”