Turkey threatens to fight back against United States sanctions

Saturday, 18 Aug, 2018

The Third Penal Court in Izmir on Friday rejected an appeal for the release of US pastor Andrew Brunson from house arrest during his trial, local media reported.

On Friday, Turkey's state-run Anadolu news agency said a high court in Izmir had upheld a lower court's decision earlier this week to keep Brunson under house arrest.

Mr Brunson is being held in a Turkish jail for allegedly supporting a group that Ankara blames for an attempted coup against Mr Erdogan in July 2016, a charge he fiercely denies.

The North Carolina native's case has rapidly soured relations between Washington and Ankara, with the two sides trading increasingly heated rhetoric and retaliatory tariffs.

Trump prefaced Mnuchin's remarks by saying that Turkey had not been a very good friend to America. "He's not a spy". "They said they came to Qatar's support during Doha's row with its Arab neighbors, and now it was Qatar's turn to pay back the favor".

"Any conversations we have with China to come up with a deal and any conversations we have with Mexico would be seen as a win for the U.S." said Jeffrey Frankel, president at Stuart Frankel & Co in NY.

Tensions between Turkey and the U.S. have been on the rise as Trump has pressed for the release of the pastor.

The United States has already imposed sanctions on two Turkish government ministers and doubled tariffs on Turkish steel and aluminum imports.

US Treasury chief Steven Mnuchin earlier said the US could put more sanctions on Turkey.

President Donald Trump doubled tariffs on Turkish metals exports to the United States last week prompting Ankara, which says it will not bow to threats, to raise tariffs on USA cars, alcohol and tobacco by the same amount yesterday.

On Wednesday, U.S. Vice President Mike Pence tweeted, "Turkey would do well not to test [President Trump's] resolve to see Americans who are wrongfully imprisoned in foreign lands returned home to the United States".

Ebbing concerns over the fallout from the Turkish lira's recent slide also helped strengthen the euro against the dollar. Brunson's lawyer said he would appeal again in 15 days.

He said Turkey would emerge "stronger" from the currency crisis and ruled out an International Monetary Fund bailout.

"There has been no improvement in relations with the USA and additional sanctions may be on the horizon", said William Jackson of Capital Economics in a note to clients, adding that the lira could see a downward trend in 2019 and beyond. The currency was supported by Turkey's plan to cut spending, support for the banks and Qatar's pledge to invest $15bn in the country.