Erdogan warns Trump Ankara may seek ‘new friends’

The arrest of an evangelical pastor in October 2016 soured deeply delicate relations with between Washington and Ankara

The arrest of an evangelical pastor in October 2016 soured deeply delicate relations with between Washington and Ankara

He does have an understandable reason: Turkey has been holding an American pastor captive for 21 months, on grounds that the preacher was involved in the failed coup attempt against Turkish president Recep Tayyip Erdogan in 2016.

President Trump's sanctions saw the Turkish lira plummet to a risky low, causing a financial crisis that has also threatened to destroy Europe after it triggered concerns with banks in Spain, Italy and France.

"It is wrong to dare bring Turkey to its knees through threats over a pastor", Erdogan told a rally in the Black Sea town of Unye.

American evangelicals have pressed Mr Trump for action on Pastor Brunson, who was held in prison for nearly two years but was recently moved to house arrest. "If there are euros, take these out ... immediately give these to the banks and convert to Turkish lira and by doing this, we fight this war of independence and the future".

He did not offer an explanation for the tariff hike, which raises the tariffs to 20 percent on aluminum and 50 percent on steel, though there are a couple of possibilities.

High-level meetings in Washington between USA and Turkish officials over Brunson ended this week, apparently without a resolution.

Mr Erdogan said although the nations had been allies for decades, Turkey "now has alternatives".

"President Erdogan's strengthened powers under the new presidential system have made it increasingly uncertain whether policymakers will be able to act to stabilize the economy", William Jackson, the chief emerging markets economist at Capital Economics in London, said.

"Also completely underestimated is Turkey's capacity to effectively shut down everything that happens in Brussels if they want to, because Brussels works on consensus and nothing, literally nothing happens without consensus", he said.

Turkey's currency sank to record lows on Friday amid panic about the country's economic health and souring relations with the United States.

As the lira tumbled in value - with no breakthrough in sight in the impasse with the U.S., sparked by the jailing of American pastor Andrew Brunson - the government has remained sanguine with few comments aimed at rallying markets.

President Donald Trump on Friday tweeted that he had authorized the doubling of steel and aluminum tariffs on Turkey.

"We are aware that the issue is not the dollar, euro, gold. these are the bullets, cannon balls, missiles of the war started against us", said Erdogan.

The Turkish lira dropped as much as 18 per cent at one point after Mr Trump's announcement - the biggest one-day fall since a 2001 financial crisis in the country.

UBS chief economist for EMEA emerging markets Gyorgy Kovacs said a giant rate hike of 350-400 basis points would be "consistent with real rate levels that in the past helped to stabilise the currency" but warned a deal to normalise ties with the United States may also be needed.

The US retaliated by issuing sanctions on two leading Turkish officials last week. "The entire Turkish public is against U.S. policies that disregard Turkey's legitimate security demands", Kalin, also a spokesperson for Erdogan, wrote for the pro-government Daily Sabah newspaper.

He also said it was a pity that Washington chose Brunson over Turkey, its partner in North Atlantic Treaty Organisation, and in an opinion piece published in the New York Times, he warned the United States that Ankara had other alternatives as allies.

Without naming any country, Erdogan said that those - who stand against Turkey for the sake of small calculations - would pay the price.

"The US and Turkey are breaking up".

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