For European firms, resisting American sanctions may be futile

“Donald Trump is the sort of guy who punches you in the face and if you punch him back, he says ‘Let’s be friends’. China punched back and he retreated. The Europeans told him how beautiful he was, but they got nothing.” This is how an American official-turned-executive describes the latest twists in the Trump administration’s sanctions policy, which this year has roiled business from America to Europe, Russia, China and Iran. What business leaders see, analysts say, is a punitive approach that is capricious, aggressive and at times ill-prepared. But unless companies or their governments take the fight all the way to the White House, they have little choice but to abide by the long—and sometimes wrong—arm of American law.

The capriciousness was evident on May 13th when President Trump executed a handbrake turn on ZTE, the world’s fourth-biggest telecoms-equipment maker, which is strongly supported by the Chinese government. It had been brought to the brink of bankruptcy after the American government in April banned its firms from supplying it with components. That was punishment for ZTE’s violation of American sanctions against Iran and North Korea and for its subsequent lies about how it censured the staff involved.

In two surprise tweets, Mr Trump said he was working with China’s president, Xi Jinping, to bring ZTE “back into business, fast” and that the lifeline was part of a larger trade deal with China. American congressmen said this smacked of submission to retaliatory pressure from China.

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