Aug 09 2018

U.S. positioned for more sanctions on Turkey – WSJ

U.S. President Donald Trump’s administration is positioned to impose more sanctions on Turkey after talks over the release from Turkish custody of U.S. pastor Andrew Brunson broke down, the Wall Street Journal reported.

The breakdown in the negotiations in Washington on Wednesday makes it more likely that the U.S. government will take new punitive steps against Turkey, such as imposing sanctions on other Turkish leaders, U.S. officials said, according to the newspaper. It introduced penalties against Turkey's interior and justice ministers last week for their role in the internment of Brunson.

The failure of the talks deepens a crisis between the two countries over the internment of Brunson, a NASA scientist and three local U.S. consular workers. All are charged with terrorism for their alleged links to the Fethullah Gulen movement, which Turkey blames for orchestrating a failed coup in July 2016. The lira slumped to a record low of 5.43 per dollar on the news.

The United States is demanding that Brunson and other Americans be released from custody immediately. The two NATO members have clashed repeatedly over policies in Syria – Turkey invaded the country in January to battle Kurdish fighters allied with Washington against Islamic State (ISIS) – and a trial of Turks in New York who allegedly broke U.S. sanctions on Iran with the aid of a Turkish state-run bank.

Investors are warning that the crisis with the United States is sending Turkey’s lira into possible meltdown, raising the prospect of an emergency International Monetary Fund program or capital controls.