The Turkish-American war of words, sanctions and tariffs

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By

Tom Arms

 

 

The Turkish-American war of words, sanctions and tariffs could be called the clash of the titanic egos. Or perhaps, alternatively, the battle of the thin-skinned presidential godzillas.

 

Both President Trump and President Erdogan have problems with the press, conspiracy theories and political opponents. With 100,000 opponents languishing in Turkish jails, President Erdogan appears to have had more practical success than his American counterpart, but then he has been in power for 13 more years than The Donald.

 

The two men, however, do appear to have a great deal in common. Both men believe that a personal attack on them is an attack on their country as they have come to equate their personal interests with the national interest. They both regard the press as enemies of the people because the free press opposes them and they regard themselves as the only legitimate representatives of the people. And finally, they are both convinced that a deeply-entrenched liberal establishment is plotting to overthrow them.

 

It can also be argued that both men have fallen victim to the comparison of oxygen and common sense: The higher you rise the rarer it becomes in both the physical and political atmosphere.

 

Perhaps because Erdogan has been flying high for so much longer than Trump he is exhibiting more signs of erratic lightheaded behaviour than his American counterpart, although Trump is far from rational.

 

Turkey’s current crop of problems are an object lesson in the consequence of abusing economic tools to gain personality-based political power. For several years Erdogan has pursued a policy of cheap credit and high growth over high prices. Turkish GDP growth for years was just behind that of booming China and India.

 

There were jobs for everyone. The lira went up. The people were happy and Erdogan’s popularity soared. On the back of the country’s economic performance, Erdogan was able to move from prime minister to president, rewrite the constitution, jail his opponents and have himself elected de facto dictator. He has also moved secular Turkey back towards his personal Islamic roots, strained relations with the West, moved troops into Northern Syria, suppressed the Kurds, locked up his opponents, destroyed the press, politicised the judiciary and flirted with the Russians.

 

The problem was that to achieve all the above, Erdogan had to relinquish Turkey’s economic sovereignty. The growth that paid for his populist push was financed by foreign lenders. This meant that Turkish companies borrowed dollars from foreign banks to finance production which was sold in Turkish lira. This was fine as long as the Turkish lira rose, but if it should fall…

 

The lira did indeed start to fall early this year and there was a time during Erdogan’s recent presidential campaign when the nascent economic problems appeared to threaten his hold on power. But he persuaded the electorate that the dip was a glitch that would soon correct itself. But it continued to fall and the recent imposition has forced a collapse. Since the start of 2018, the lira has lost half its value against the dollar and it is difficult to see how Erdogan can avoid a recession.

 

The sanctions were imposed over the fate of American Pastor Andrew Brunson whom Erdogan locked up after accusing him of involvement in the 2016 coup attempt. President Trump is heavily dependent on America’s evangelical right to stay in office and they have been pressuring him to force the release of Brunson. Trump managed to persuade Erdogan to move Brunson from prison to house arrest, but the evangelicals want him released altogether and Erdogan refused to accommodate them. The result was American sanctions countered by Turkish tariffs and accompanied by the usual bitter war of words.

 

Trump is in the unusual position of accompanying the moral high ground. But political realities dictate that he should tread carefully. Turkey is a geostrategic NATO ally. It has the second largest army in the alliance. It guards the Bosporus and Dardanelles Straits which keep the Russians bottled up in the Black Sea; straddles Europe and Asia and provides strategic airbases for NATO operations in the Middle East.

 

On top of that Erdogan has been flirting with the Russians, keeping 2.5 million refugees from flooding Europe and threatening a clash with Syrian-based Kurds who are being aided by 2,000 American special forces.

 

Then there is the economic fallout. The Turkish companies who borrowed $250 billion are not the only ones in trouble. So are the Western banks who loaned them the money. The Italian and Spanish banks are already shaky. The $18.5 billion owed to the Italians and the $81 billion owed to the Spaniards could push them over the edge. French banks have $35 billion at risk; the Germans $12.7 billion; the British $16.9 billion and the US $18.1 billion.

 

A Turkish default would also result in an international squeeze on capital as money becomes tight in Europe. The Argentine economy is already starting to suffer because the Italian and Spanish banks are their main source of foreign finance. France and the UK are a big source for India whose rupee has started to drop.

 

The situation is further complicated by America’s trade war with China, disputes with Canada and sanctions against Iran. The situation requires delicate handling. Unfortunately, a very indelicate man occupies the White House.

 

 

 

 

Tom Arms

I am a journalist, entrepreneur and historian with extensive experience in print, web and broadcast journalism. I started as a diplomatic correspondent, wrote several books (The Falklands Crisis, World Elections On File and the Encyclopedia of the Cold War), and then in 1987 started my own business (Future Events News Service, www.fensinformation.com) which over 25 years established itself as the world and UK media’s diary. Our strapline was: “We set the world’s news agenda.” I sold FENS in December 2012 but retained the exclusive broadcast rights to all of FENS data. To exploit these rights I set up LookAhead TV which produces unique programmes which “Broadcasts Tomorrow Today” so that viewers can “Plan to Participate.” LookAhead has appeared regularly on Vox Africa, Radio Tatras International, The Conversation and Voice of Africa Radio.

In addition to being a syndicated broadcaster and columnist on global affairs, Tom is also available for speaking engagements and can be contacted on TwitterLinkedin and emailtom.arms@lookaheadnews.com.

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