US curbs on Moscow jolt major allies
Ronald Reagan's latest economic sanctions against Moscow, if implemented despite squeals of protest from his allies, will seriously complicate plans for a mammoth gas pipeline from Siberia to Western Europe.
These United States restrictions, announced June 18, also stand to damage a joint Soviet-Japanese bid to develop oil and gas deposits off the eastern Soviet island of Sakhalin.
The West Europeans and Japanese, even under the best of circumstances, might be expected to grate at moves to spoil such projects.
Resentment is particularly strong, however, at a time when the Americans are all but begging for the chance to peddle huge amounts of grain to a Soviet leadership beset by a succession of disappointing domestic harvests.
The expectation among foreign experts here is that President Leonid Brezhnev and other Kremlin leaders will do all they can to encourage allied resentment over the new American sanctions, while its trade officials scurry to come up with substitute components for the affected energy projects.
(Probably, the Soviet propaganda machine will also chime in with assurances that all US sanctions are laughably ineffective, a chorus that will make nice headlines but won't change economic facts of life.)
There is another option open to the Soviets: a counterstrike in the plentiful world grain market. Moscow has long valued the quality and price of US shipments , but it moved to diversify its sources of imported grain in response to a Carter administration embargo. The Soviets could seek to accelerate that process , finding it politically useful to favor other suppliers.
The latest Reagan trade restrictions were a follow-up to those announced at the turn of the year in response to imposition of martial law in Poland. The earlier sanctions nixed the supply of US-made rotors earmarked for the roughly 40 compressor stations along the multibillion-dollar Siberian gas pipeline.
That move, in itself, seemed likely to delay completion of the Soviet-West European piping project by many months, the assumption being that French-based Alstholm-Atlantique would be asked to begin producing such rotors under an existing license.