Turkish President Recep Tayyip Erdogan has said the United States will refrain from imposing sanctions on Turkey over Ankara’s planned purchase of a missile defence system from Russia. But he pledged to retaliate if the punitive measures do materialise.
Speaking at a rare news conference for foreign media in Istanbul, Erdogan repeated on Thursday that the purchase of Russian S-400 systems was a “done deal” and said the US should think carefully before imposing sanctions on Turkey, a member of the North Atlantic Treaty Organization (NATO).
“I say this very openly and sincerely, our relations with [US President Donald] Trump are at a place that I can call really good,” Erdogan said. “In the event of any issues, we immediately work the phones.”
“I do not see any possibility of these sanctions happening,” Erdogan added. But he said Turkey would respond proportionately. “The US has to think about this very carefully. We will have sanctions of our own.”
However, some experts say Trump will have no choice but to slap sanctions on Turkey under the Countering America’s Adversaries Through Sanctions Act (CAATSA), a 2017 Congressional bill penalising any entity that has purchased military equipment from an American foe.
“If Turkey takes delivery of the S-400, the CAATSA legislation directs the president to impose sanctions on Turkey for buying defence articles from Russia,” said Steven Cook, a senior fellow at the Council on Foreign Relations. “The legislation gives the president the option of choosing five of 12 areas where he ‘shall’ apply sanctions.”
But Cook told Al Jazeera that “the president can apply sanctions and immediately suspend [them] for 180 days for an unlimited amount of times…There may be sanctions and no sanctions all at the same time”.
He added that Congress had “quite rightly” labeled Russia as a threat to the US, and that Turkey’s missile system purchase was “particularly egregious given Ankara’s NATO membership and the idea that Turkey is supposed to be a ‘strategic partner’ of the United States”.
‘Rattle the markets’
Cook said that CAATSA sanctions would have a significant effect on Turkey’s economy.
“There is no doubt that sanctions will rattle the markets and precipitate a selloff of Turkish securities as well as the lira,” he said. “If the President immediately suspends sanctions, however, the impact would be temporary.”
He added that Turkey’s currency would go through more “volatility and devaluation” before stabilising. Last year, a 30 percent drop in the value of the lira drove Turkey’s economy – the largest in the Middle East – into recession, and the currency has fallen another 10 percent this year as markets remain on edge.
Yet Cook said that a US decision to force Turkey out of the F-35 fighter jet program would be more “consequential” for its economy, with the same impact of sanctions but without a way for Trump to shelve implementation.
Washington has been at loggerheads with Erdogan’s government for months over the planned purchase of the Russian missile defence system, which Trump’s administration says is incompatible with NATO’s defence network. The US says the system will compromise its F-35 fighter jets – aircraft that Turkey is not only helping to build, but also planning to buy.
The US has been threatening to impose sanctions on Turkey unless it scraps the plan to buy the Russian S-400 missiles. Erdogan has refused to back down and said on Thursday that deliveries are likely to start within the first half of July.
Ankara has been pinning hopes on Trump to waive sanctions. And Erdogan has promised to discuss the issue with Trump at the G20 summit in Japan at the end of June.
‘Teetering on the edge’
While Erdogan said he has good ties with Trump, he could not say the same about relations between his government and other US officials.
“When we have talks with those below Trump, we see that many cannot agree with our officials, and one example is the S-400 issue,” he said.
But the US Congress will undoubtedly act soon, said Lisel Hintz, an assistant professor at the Johns Hopkins University’s School of Advanced International Studies.
“There is strong – and rare – bipartisan support for [Turkey] sanctions,” Hintz told Al Jazeera, adding that political backing is from the leaders of the Senate Armed Services and Foreign Relations Committees.
Nevertheless, Hintz said the harsh rhetoric from the legislative branch was “undermined by Trump’s personal indications to Erdogan that a workaround could be found”.
The mandatory sanctions are reportedly set to target Turkey’s key defence sector as early as July, effectively severing certain companies from the US financial system, Bloomberg news reported.
“Whichever areas the sanctions target, the message of uncertainty and instability that they communicate to investors will likely have a greater impact on Turkey than any direct revenue lost,” Hintz said.
She added that Turkey’s economy was “teetering on the edge of crisis … due to longstanding practices of over-borrowing and over-spending to keep voters happy”. Any additional shocks might be catastrophic, she said, amid mounting “public frustration with high inflation and unemployment numbers”.
In any case, Hintz said that Ankara had jumped into Moscow’s orbit after Turkey’s tourism, construction, and other sectors absorbed “swift, sweeping, and hard-hitting losses” from Russian sanctions after the 2015 shootdown of a Russian jet.
That experience “prompted a reset that not only eased economic pressures but also opened up the space for cooperation with Russia on Syria, pipeline construction, and, of course, the defence system procurement to which the US so vehemently objects”.