US threatens more Turkey sanctions if pastor not freed

US threatens more Turkey sanctions if pastor not freed

Troy Powers
August 18, 2018

The US warned Thursday it would levy more sanctions on the troubled Turkish economy if Ankara does not soon release a jailed American pastor described by President Donald Trump as a "hostage".

Brunson, an Evangelical pastor residing in the coastal province of Izmir, is standing trial in Turkey over terrorism charges.

The investment package was announced after Qatar's Emir Tamim bin Hamad Al-Thani met President Tayyip Erdogan in the capital, as Turkey grapples with a collapsing lira and a worsening commercial and political standoff with North Atlantic Treaty Organisation ally the United States.

Turkey's lira, meanwhile, dropped nearly 3 percent to almost 6 per dollar again, having recovered ground rapidly in recent days.

Last week, Trump said he had doubled the tariffs on aluminium and steel from Turkey, sending the Turkish currency into free fall. "Working with you, we have more that we're planning to do if they don't release him quickly".

"They have not proven to be a good friend", Trump said of Turkey during the Cabinet meeting.

Another steep decline in the Turkish lira on Friday pushed emerging market equities lower and kept other world markets cautious, overshadowing hopes that an upcoming U.S.

Turkey responded by increasing tariffs on imports from the USA including cars, alcoholic drinks and leaf tobacco - and the lira recovered slightly.

Escalating tensions on trade between the United States and some of its largest trading partners had driven traders to sell emerging market currencies and take to the safety of the USA currency.

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Turkish Finance Minister Berat Albayrak and his French counterpart Bruno Le Maire spoke by phone on Friday and discussed USA sanctions steps against Turkey, agreeing to act together in response to such moves, the Turkish ministry said.

USA authorities have rebuffed efforts by Turkey for the extradition of Gülen, who lives in Pennsylvania.

Ankara has accused Brunson of being linked to the Gulen movement, which it says was responsible for the failed coup attempt in 2016.

Erdogan thanked the emir and the people of Qatar for "standing by Turkey", the official Anadolu news agency reported.

One currency trader said on Friday's lira weakness was driven by "the new United States sanctions threat and the S&P decision, with position-closing in markets ahead of the public holiday".

"The trade talks and the back and forth on Turkey is really going to be the stuff everybody's watching", said Blake Gwynn, an interest rate strategist at NatWest Markets in Stamford, Connecticut.

The issue has led to a dramatic souring of U.S. -Turkey relations.

Turkey's finance minister sparked a recovery in the lira yesterday after he addressed thousands of global investors on a conference call. The currency has rebounded strongly after hitting a record low of 7.24 at the start of the week, bolstered by central bank measures to support it and Qatar's pledge to invest $15 billion in Turkey.