Report

Five Questions About the Crisis Between Washington and Ankara

How a dispute over a jailed American pastor roiled Turkey’s economy.

U.S. President Donald Trump and Turkish President Recep Tayyip Erdogan deliver joint statements at the White House on May 16, 2017. (Michael Reynolds-Pool/Getty Images)
U.S. President Donald Trump and Turkish President Recep Tayyip Erdogan deliver joint statements at the White House on May 16, 2017. (Michael Reynolds-Pool/Getty Images)

Tensions had been simmering for months between Washington and Ankara over Turkey’s ongoing imprisonment of an American pastor in connection with a 2016 coup attempt against President Recep Tayyip Erdogan. In recent weeks, the tensions boiled over, prompting American sanctions and tariffs and plunging Turkey’s economy into crisis. As the impact ripples around the globe, here are five questions about the crisis and the possible implications for the global economy.

How did we get here?

President Donald Trump announced last week that he would double U.S. tariffs on Turkish steel and aluminum, rattling international markets and feeding fear of the potential collapse of the Turkish lira. But Turkey’s economic crisis has been long in the making. For most of his tenure, President Recep Tayyip Erdogan has benefited from enviable levels of economic growth, fed by foreign investment and a construction boom. But rising global interest rates, combined with cooling investor interest in emerging markets like Turkey, have threatened to end the good times. Much of Turkey’s debt is in U.S. dollars, making it even more costly to pay down with a weakening lira. The final straw for international investors, according to Aaron Stein, a senior fellow at the Atlantic Council, was Erdogan’s decision to appoint his son-in-law as finance minister. The unmistakable message, according to Stein, was that “we will not raise interest rates in the face of a currency collapse.”

How has the global economy responded?

The U.S. tariffs and the sharp decline in the Turkish lira have spooked investors in emerging markets all over the world, such as Argentina and South Africa—countries that are also likely to see their borrowing costs rise. The Indian rupee hit an all-time low against the dollar and other countries are worried about their own currencies. “Actions that heighten these tensions risk spreading today’s financial challenges to other emerging markets, to European banks, and, ultimately, to the U.S. economy,” said Myron Brilliant, the executive vice president and head of international affairs for the U.S. Chamber of Commerce in a statement on Tuesday. “For months, the U.S. Chamber [of Commerce] has warned that alienating our allies in a tit-for-tat trade war would harm the U.S. economy and undermine American global leadership,” he said. But State Department spokesperson Heather Nauert said the blame rests with Turkey. “The economic woes did not begin when we put in place those … sanctions,” she told reporters at a press conference on Tuesday. Eswar Prasad, an economist at Cornell University, said the Turkish crisis may encourage traditional U.S. allies who no longer see the United States as a reliable and trustworthy partner in trade matters; to gravitate toward other countries, like China and Russia; and to shield themselves from U.S. economic pressure campaigns.

What’s at stake for Washington?

Some analysts believe Trump’s aggressive approach toward Turkey, a NATO ally, could backfire. Incirlik Air Base in southern Turkey is key launching pad for the U.S.-led campaign against the Islamic State in Iraq and Syria, and is also home to a U.S. stockpile of B61 nuclear bombs, a linchpin of nuclear deterrence in Europe. Turkey’s military and the Turkish-backed Free Syrian Army are also heavily involved in operations in northwest Syria near Idlib province. The Pentagon recently announced that the U.S. and Turkey would soon begin conducting joint patrols in northern Syria near the volatile city of Manbij. The latest tensions could put some of these operations in doubt. Beyond Syria, Turkey’s geographical position at NATO’s southern flank gives the alliance unique leverage to pressure Russia. “The fundamental problem Washington faces here is that Turkey’s geographical location is invaluable,” said Loren Thompson, an analyst with the Lexington Institute. Trump’s decision to hold up the transfer of 100 F-35 fighter jets to Turkey is another blow to Ankara but could also complicate matters in the region for the United States.

What’s Turkey’s strategy?

In recent years, Turkey has edged closer to Iran and Russia, two of the United States’ strategic rivals. It has cooperated with both countries in strategy over Syria and moved to purchase S-400 missile defense system from Moscow. President Erdogan warned in a New York Times op-ed published on Friday that if the United States fails to address Turkey’s concerns, Turkey might have to “start looking for new friends and allies.” Some observers saw it as a bluff—an attempt to play great powers against each other. But others believe it was inevitable that Ankara would clash with the West. Aykan Erdemir, a former member of the Turkish parliament who is now with the Foundation for Defense of Democracies, said the dispute ran deeper than the jailing of the American pastor. “Erdogan has been pivoting Turkey away from the trans-Atlantic alliance and toward Russia and Iran for a while, and it was only a matter of time before Turkey had a crisis with its NATO allies,” he said. Erdemir maintained that Erdogan’s increasing estrangement from the United States and the European Union was a consequence of “his increasing consolidation of power in Turkey.” But Stein, of the Atlantic Council, said Turkey has too much at stake in preserving its position in NATO. “Turkey doesn’t want to leave the alliance,” he said.

Can Trump and Erdogan make this right?

The crisis pits two blustery political leaders with oversized egos and a tendency to escalate even relatively minor feuds. Trump has sought to exploit Turkey’s economic woes to secure the release of the evangelical pastor, Andrew Craig Brunson, who is accused of having aided Erdogan’s opponents in the 2016 coup attempt. The White House claims that Brunson is the victim of an “unfair and unjust” political smear campaign. Trump reportedly believed that he had reached agreement last month with Erdogan to free Brunson in exchange for Israel’s release of a Turkish woman accused of providing funds to Hamas. The woman, Ebru Ozakan, was released on July 16. But Brunson remains under house arrest. On Aug. 8, talks between the United States and Turkey in Washington stalled after the Turkish delegation sought relief for a sanctioned Turkish bank. Two days later, Trump tweeted he would double steel and aluminum tariffs, predicting the Turkish lira would slide “rapidly downward against our very strong Dollar!” U.S. and Turkish officials have continued to meet to try to end the crisis. But Nauert, the State Department spokesperson, told reporters there was no new news on Brunson as of Tuesday. “Progress is having [Pastor] Brunson on a plane … coming back to the United States,” she said. “We hope to have him brought back very soon. We have long said that that is long overdue.”

Colum Lynch is a senior staff writer at Foreign Policy. Twitter: @columlynch

Robbie Gramer is a diplomacy and national security reporter at Foreign Policy. Twitter: @RobbieGramer

Lara Seligman is a staff writer at Foreign Policy. Twitter: @laraseligman

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