Sitting on the Baltic Sea, the small eastern German town of Sassnitz has been working for years to revive its enormous port, including taking on a role supporting a Russian pipeline being laid offshore to deliver natural gas to Germany. But the port, one of the last great infrastructure projects undertaken by the former East Germany, now finds itself caught up in a geopolitical competition between the United States and Russia, a clash that local officials and residents say is threatening the town and region with economic ruin.

At issue are so-called secondary sanctions being proposed by powerful U.S. senators to target companies doing business with Russia and the Kremlin-controlled gas giant Gazprom to finish the pipeline, Nord Stream 2, which is 94 percent complete. The port would fall under the sanctions because of the role it plays supplying provisions to a Russian pipe-laying ship involved in the project. That sort of supporting work is specifically targeted by the proposed new sanctions.

The penalty, if the sanctions are imposed, would mean being cut off from the United States “commercially and financially,” and effectively excluded from the global financial system. The port would essentially be turned into an international pariah, with all its business drying up — not just its work supplying the Russian ship. To German officials and residents in Sassnitz, the sanctions against the port and the company that owns it, Fährhafen Sassnitz, are puzzling and infuriating. They threaten to turn Sassnitz into collateral damage as the town struggles to create enough jobs to keep young people from leaving.
“They are firing their cannons at sparrows,” said Edgar Taraba, as he unloaded a morning’s catch of flounder and sole from his dinghy. “There is nothing left here to take.” The port, called Mukran, is a shadow of its former self, run by a company that is 90 percent owned by the Sassnitz government and the rest by the northeastern state of Mecklenburg-Western Pomerania.

The Trump Administration, supported by Poland and the Baltic nations, has long opposed the pipeline, seeing it as an instrument for Russian leverage over Germany, Ukraine and Central Europe. One U.S. fear is that Russia, which has a history of using gas supplies as a political tool, could cut off energy supplies at will.

But defenders of the project say that Russia is more dependent on the income from the gas than Germany is on its supply, and that Washington is angling to sell Europe its more expensive liquefied natural gas.

Officials in Berlin and Brussels are furious that the Trump administration is using the same type of sanctions employed against companies doing business with North Korea or Iran against an ally and a European project in which American companies play no part.