One of the most prominent political figures in Cold War history, Margaret Thatcher, led Britain as the only female prime minister from 1979 to 1990. In these brief excerpts from their oral histories, Tom Niles recalls the surprisingly acrimonious meeting between President Reagan and Thatcher over sanctions, which eventually led to Secretary of State Haig’s resignation. In a very different anecdote, Lynne Lambert, who was trade policy officer at Embassy London, tells of a rather awkward situation with the Chancellor of West Germany.
The daughter of a grocer, she became a member of Parliament in 1959. Known popularly as the “Iron Lady,” Thatcher was famous for her fiercely conservative politics and her tough disposition. She quickly became a global political force, equally controversial and influential as she challenged and shifted British policies from what they had been since the end of WWII. Her many significant accomplishments during her career include improved economic standing for Britain and a successful war against Argentina over the Falkland Islands. Thatcher shared a close relationship with President Ronald Reagan due to similar political and philosophical ideologies. This relationship contributed much to ending the Cold War. Thatcher passed away on April 8, 2013 at the age of 87.
“Ron, This is totally unacceptable between friends”
Excerpt from Tom Niles, Deputy Assistant Secretary for European Affairs
NILES: The Siberian Pipeline issue led to a major problem in Alliance, you might even say a major crisis in West/West relations. As we can sometimes do, we turned an East/West issue into a West/West issue…. Acting unilaterally, which we often do, we had imposed sanctions in December 1981 against the USSR which prevented American companies, primarily General Electric but also some other U.S. companies which supplied goods and services for pipelines, from participating in the project from their production in the United States. This was a loss to GE, which made pipeline turbines in Schenectady and other companies, such as Dresser/Atlas and Cooper Industries, which made compressors, and so forth. But, we had not imposed sanctions on the European licensees and subsidiaries of those companies. All during the spring of 1982, we tried to get the Europeans to join us in an effort to better control the economic relationship with the Soviet Union, but basically, they gave us the brush-off…. In June 1982, with the frustration level rising in Washington, several things happened. Secretary Haig’s position obviously was becoming weaker. We didn’t realize at the time how weak it was. I’m not sure he realized how weak it was. Pressures were mounting for tougher action on the pipeline, led by [Defense] Secretary Weinberger….
The issue on the table concerned proposals advanced by the Defense Department and the NSC to extend the sanctions to cover the subsidiaries and licensees of American companies in Europe. These were European companies, even if some of them were American owned. But mainly we were talking about licensees of the American companies, particularly GE. These were Nuovo Pignone in Italy, John Brown Engineering in the United Kingdom, AEG in Germany, and various other companies that built large case turbines based on GE designs and technologies. [Deputy Secretary] Larry Eagleburger represented the State Department and I tagged along to this meeting, on June 30, 1982. The participants included President Reagan, NSC Advisor Clark, Secretary Weinberger, Ambassador Kirkpatrick, and CIA Director Bill Casey, who basically mumbled, but supported the sanctions.… Larry Eagleburger was really all by himself. He made a strong pitch against a decision to extend the sanctions extraterritorially.
President Reagan smiled at him after he made the presentation and said, “Thank you very much, Larry. That is very interesting.”… Their proposal was accepted and we issued the Executive Order extending the sanctions. It created an enormous outrage in Western Europe, much like Helms-Burton [on Cuba] and ILSA [Iran-Libya Sanctions Act] today, but in a very immediate way, because it related to Western European ties with Eastern Europe and the Soviet Union. It seemed to be a good example of how the United States was trying to make policy for them. Even those countries, such as the United Kingdom, that were very supportive of the United States reacted very negatively. Mrs. Thatcher was a good friend of President Reagan, but she was outraged by this decision. We were in a real mess.
The next thing that happened was that Mrs. Thatcher came to town on July 1, 1982. She flew into New York for the Special Session on Disarmament, and then flew down to Washington…. Mrs. Thatcher’s meeting with President Reagan was the worst meeting I ever participated in between an American President and an allied leader. It was a terribly difficult meeting, all about the pipeline. President Reagan had been given some talking points by the NSC, put together by Norman Bailey, which among other things, included the claim that we had been in touch with the European countries, including John Brown Engineering, the British company, and they had told us that they really don’t care much about the sanctions, that it didn’t bother them very much.
At that point, Mrs. Thatcher looked around at the collection of people sitting in the Oval Office. It was the President and Mrs. Thatcher, UK Ambassador Wright, his senior aide Charles Powell, [NSC Advisor] Judge Clark, Secretary Haig, Jimmy Renschler from the NSC staff, and I. Mrs. Thatcher looked around at us when President Reagan used those talking points, and she hissed at us, rather like a snake, and said, “Put down your pencils,” which meant, “Don’t take notes.” So, we quickly stopped taking notes. She said to the President, “Now Ron, let me tell you something. I am responsible for my companies and you are responsible for yours. But don’t you try to be responsible for my companies. I will speak for my companies such as John Brown Engineering. And I can tell you that this is totally unacceptable between friends.” President Reagan didn’t like to have controversy with good friends. He tried, unsuccessfully, to smooth it over. But, it was a very difficult meeting. I think this demonstrates how raw the relationship was, even with our good friend Margaret Thatcher, over these sanctions. The meeting lasted for about an hour or so. Secretary Haig and I took Mrs. Thatcher out to the Reflecting Pool. She was in a terrible mood and got in her helicopter to fly out to Andrews. We didn’t fly out with her.….
Secretary Haig…was in a terrible, foul mood. We went back to the State Department. It turned out that at that meeting he had told Judge Clark that 
he would have to resign if the situation did not change. Judge Clark suggested that the Secretary talk with the President the next day, and the President accepted Haig’s resignation at that meeting. Shortly thereafter, Secretary Shultz came on board. I believe it was on July 4.
Secretary Shultz realized that we had a very serious problem with our European allies. He initiated a process which began in earnest at an informal meeting of the NATO Foreign Ministers, which he held outside New York on one of the Rockefeller estates just before the United Nations General Assembly. The UNGA began around September 21, so that meeting was around September 19. He began a process which led to an agreement on November 7, 1982 with NATO and Japan on managing our economic relationship with the USSR. We primarily used the G-7 as the basis to negotiate this understanding, although some of the talks were held on a Quadripartite [U.S., UK, West Germany and France] basis. The agreement was really more of an understanding and simply said that the economic relationship between the Western Allies and the USSR had to be seen in the context of the overall security relationship and that we would seek to reach separate understanding in NATO and in the OECD [Organization for Economic Cooperation and Development], including the International Energy Agency to ensure that the economic relationship did not in some way cause harm in the security area. On our side, the United States agreed to lift the sanctions President Reagan imposed on July 1, 1982.
But Madame Thatcher, It was a Really Good Cream Puff
Lynne Lambert, trade policy officer, Embassy London
LAMBERT: She delivered. When the going was rough, she was there. She asked for favors in return. She was just a very dominant political personality. We did have a special relationship. She looked very solid. There were many of us in the embassy who felt she was missing the boat on Europe, and that her stridency about it all was a liability. I think she was a bigger than life character. You had to take notice or laugh or admire her, whatever.…
There’s a funny story that was making the rounds when I lived in London. Helmut Kohl, a conservative, was just elected Chancellor in Germany, and Thatcher was thrilled. She thought everybody else in office in Europe was a flaming socialist, but here was someone like her. She had trouble arranging an initial meeting, and finally canceled her schedule to meet him during his annual visit to a reducing spa in a small village in Germany. Her staff tried to negotiate a lengthy substantive agenda, but his staff wanted something more informal, and relatively short. The resulting agenda was a compromise, and a two-hour meeting was envisioned. After about 40 minutes, Kohl pled another engagement and left. Thatcher, with nothing to do, strolled around window shopping. She saw Kohl in a café, eating a cream puff and reading a newspaper….