Abu Dhabi, UAEMonday 24 June 2019

An economic war with political repercussions

Erdogan’s responses are throwing fuel on the fire of the stand-off with the United States

US President Donald Trump and Turkey's President Recep Tayyip Erdogan at the Nato Summit in Brussels last month. Olivier Hoslet / EPA
US President Donald Trump and Turkey's President Recep Tayyip Erdogan at the Nato Summit in Brussels last month. Olivier Hoslet / EPA

Another day, another series of extraordinary developments in the self-imposed economic crisis that is engulfing Turkey and threatening to destabilise the entire region.

It is just five days since President Donald Trump announced the US was doubling import tariffs on Turkish steel and aluminium, sending the lira crashing to a record low against the dollar. Instead of responding to US concerns about the detention of evangelical US pastor Andrew Brunson and attempting to calm a situation that can only play out badly for his country and his people, Turkish President Recep Tayyip Erdogan’s delusional response has been to throw fuel on the fire. Earlier this week Mr Erdogan called on Turks to boycott US electronic goods. Now he has announced retaliatory tariffs on cars, beverages, tobacco, cosmetics, rice and coal.

Turkey cannot win a trade war with America. US imports and exports from Turkey are equal in value but America’s pockets are vastly deeper. Turkey’s entire GDP of $857 billion is less than that the market value of Apple, which last week exceeded $1 trillion.

Mr Erdogan could make overtures to pour oil on troubled waters. Instead, this week he battened down the hatches and said to do so would be to “surrender” to “a political, underhand plot”. Two years on from Turkey’s attempted coup, Mr Erdogan’s behaviour continues to evince all the signs of a siege mentality.

And the longer this stand-off continues, the more worrying it becomes, not just for the people of Turkey, who will bear the immediate economic strain, but for the wider region, which risks sliding further into instability.

America and Turkey must reconcile their differences because behind the battle over Brunson, a far bigger problem looms. For the past few years Turkey, a member of Nato since 1952, has been aligning its interests with Russia. Next year, to the dismay of its Nato allies, it will take delivery of an advanced Russian air defence system which is incompatible with Nato’s defence apparatus.

Turkey is also developing other friendships that threaten regional stability. Last month Mr Erdogan attended talks on Syria with Russia's Vladimir Putin and Iranian President Hassan Rouhani. Today he welcomed Tamim bin Hamad Al Thani, the emir of Qatar, a country under boycott by the Arab quartet for its sponsorship of terrorism.

A pro-Nato Turkey contains the Iranian genie to the south. To the east it is the only barrier between Russia and the Mediterranean. And the growing prospect of a consolidated Turkish-Russian-Iranian alliance is one that threatens to further destabilise the Middle East and should raise alarm bells.

Updated: August 15, 2018 07:27 PM