Trump says Turkey has acted badly in Brunson case
- Author: Darren Santiago Aug 18, 2018,
Aug 18, 2018, 1:19
The White House has said that Turkey's tariff hikes on United States products in retaliation for sanctions against Ankara were "regrettable" and again called for the immediate release of American pastor Andrew Brunson.
His case now lies at the heart of a diplomatic crisis between Turkey and the United States that has prompted a crash of Turkey's lira currency.
The lira has weakened 35 per cent against the dollar this year as the deterioration in ties between the North Atlantic Treaty Organisation allies fuelled losses driven by concerns over President Tayyip Erdogan's influence over monetary policy. It's not clear how much more they'd be willing to contribute if the United States just keeps making things worse.
Trump on Saturday described the Protestant clergyman, who runs a small church in the western city of Izmir, as a "great patriot", saying he was being held "hostage".
US stocks suffered their worst day in seven weeks after the move, and the lira gained 7 percent against the dollar.
On Wednesday, in retaliation, Turkey increased tariffs on several US-origin products, including alcohol, tobacco products and cars.
On the first day Trump threatened Turkey with sanctions for the treatment of Brunson, Vice President Mike Pence gave a prayer at the Ministerial to Advance Religious Freedom in which he said "to believers across America, I say a pray for pastor Brunson".
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Turkey says Brunson has ties to political groups responsible for the 2016 attempted coup of President Recep Tayyip Erdogan.
The Wall Street Journal reported on Friday afternoon that Chinese and USA negotiators are drawing up a road map for their trade talks next week.
"We will pay nothing for the release of an innocent man but we are cutting back on Turkey!" he tweeted.
Indeed, the stakes are high for Turkey, as the country's economic problems extend well beyond the current crisis with the U.S.
"There was considerable risk aversion through the early part of the week with fears of Turkish contagion weighing on risk assets and that seems to have reversed somewhat here", said Karl Schamotta, a strategist at Cambridge Global Payments in Toronto. Many financial experts say Turkey should raise interest rates to reduce inflation and attract investment, but Erdogan has so far opposed a move he says would curb growth.
Other emerging market currencies, such as Russia's ruble and Mexico's peso, also rose.
One currency trader said on Friday's lira weakness was driven by "the new USA sanctions threat and the S&P decision, with position-closing in markets ahead of the public holiday".
Mr Erdogan is angry that the U.S. has not taken more action against the Gulenist movement and what he said was a failure "to unequivocally condemn" the 2016 coup attempt.