A crack in US-Turkey alliance

Turkey and the United States are falling into a serious diplomatic crisis. Although a deputy ministerial level delegation from Turkey has arrived in the US for negotiations aiming to settle the deadlocks in their bilateral ties, both Washington and Ankara continue to count on mutual trade and economic retaliation measures. The two countries are experiencing a period of gloom in the history of the relations between the two allies in the North Atlantic Treaty Organisation (NATO) bloc.

Pastor Andrew Craig Brunson was placed under house arrest after leaving a Turkish prison. (Photo: Reuters)
Pastor Andrew Craig Brunson was placed under house arrest after leaving a Turkish prison. (Photo: Reuters)

The inherently inharmonious relationship between the US and Turkey was brought to a new level of tension after Turkey arrested Andrew Brunson, a US pastor, for alleged terror ties. The US Department of the Treasury has put Turkey’s justice and interior ministers under sanctions, stating that the two ministers played an important role in the decision to arrest and detain the priest. Tensions continued to escalate after US President Donald Trump decided to double the tariffs on aluminum and steel products imported from Turkey. Ankara delivered an immediate response, asserting that they would apply retaliatory measures to Washington’s sanctions.

Turkish President Recep Tayyip Erdogan stated that Ankara could turn to new partners and allies to replace the US if they do not see any respect or reciprocity in the bilateral relations with Washington. This is considered a relatively strong and assertive statement from the Turkish leader aimed at the NATO ally, because in fact, the two sides have always strived to heal the cracks in bilateral ties so far. President Erdogan once said that he did not want to play a lose-lose game with the US. However, in the current diplomatic crisis, the Turkish leader expressed an uncompromising and tough stance over the US’s unhesitating use of a sanction “stick” toward an ally. He even e Hcounted on Ankara’s plan to start using its domestic currency, lira, instead of US dollars in trade transactions with its key partners, including Russia, China, Iran and Ukraine. The Turkish foreign ministry accused that the US President’s tax increase decision has violated the rules of the World Trade Organisation (WTO), while warning that all moves taken against Turkey would get back an adequate response.

The US’s increased sanctions have made Turkey’s domestic currency, lira, tumble sharply and lose nearly 20% of its value after only 24 hours. On the morning of August 10, the lira slid to a record low against the US dollar (6.30 lira per dollar), one day after the talks between the Turkish delegation and the US officials in Washington, aiming to tackle the diplomatic crisis, fell into a deadlock. Over recent times, the lira has constantly been devalued as investors worry that Turkey will tighten its monetary policy amid the diplomatic crisis with the US. In order to reassure investors and the psychology of the domestic people, Turkey’s finance minister, Berat Albayrak, has unveiled a new economic programme to be deployed by the government, with a commitment to ensuring the independence of the central bank and fasten the state budget discipline. The Turkish government plans to carry out structural reforms and rebalance the economy, with the expectation of achieving high and sustainable economic growth.

Turkish President Erdogan affirmed that he world win the “economic war,” underscoring that the US’s unilateral actions against Ankara would only undermine the bilateral relations and weaken the US’s interests and security. In response to the challenges posed by the US sanctions, President Erdogan called for support from the people through the sales of gold and foreign currencies, such as the US dollar, to buy the lira. He stressed that the move would be retaliation against those countries launching an economic war against Ankara by the Turkish people. The Turkish leader described the current currency crisis as a “national struggle” against economic enemies, while reassuring the Turkish people.

The mutual retaliatory moves between the US and Turkey are pushing the two allies further apart and bringing Turkey closer to Russia as well as other global and regional powers. Ankara warned that the US could lose an ally in the NATO. If the “economic war” and the diplomatic crisis between the two sides does not stop, both Washington and Ankara will fall into a lose-lose relationship between the two formerly close allies.