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The Turkey-US trade fight is not one that the United States is in danger of losing. Even before the new tariffs, the Turkish economy was in crisis. Yet as is so often the case on an international stage where institutions, alliances, and assumptions have been shifting, the economics of the dispute will probably prove less important than the politics. Turkish President Recep Tayyip Erdoğan is blaming the country’s economic crisis on Western governments, bankers, and financial institutions. “We know your shenanigans, and we will defy you,” he told his party’s congress over the weekend. The open question is whether, and how, he will follow through on that threat. Turkey matters in geopolitical terms. Straddling Europe and Asia, it has NATO’s second-largest army, after the US military. The Turks are central players in neighboring Syria, where their forces control the area across the border. If Mr. Erdoğan is willing, he could disrupt US military operations in Syria and NATO operations in the Middle East. He could even reopen the European Union to a flood of refugees, prompting a repeat of the continent’s immigration crisis in 2015. That makes a trade war into something more politically volatile.
Not all trade wars are created equal. And the latest one to hit the headlines – between the United States and its fellow NATO member, Turkey – could turn out to be among the most consequential of all.
In purely economic terms, it’s straightforward: a battle the US has not the slightest prospect of losing. But the political context is more complex, the political ripples more important, and the longer-term political effects unpredictable and potentially risky.
Turkey was among the dozens of countries on which President Trump imposed steel and aluminum tariffs in March. But he went a step further this month by doubling them on Turkey, over President Recep Tayyip Erdoğan’s failure to release an American evangelical minister arrested on what Mr. Trump and Washington say are baseless charges of anti-government activity.
The duties on Turkey don’t risk a major disruption to American companies. And even before the new tariffs, the Turkish economy was in crisis, saddled by double-digit inflation, a devaluing currency, and huge foreign debt.
Yet as is so often the case on an international stage where institutions, alliances, and assumptions have been shifting, the economics of the dispute will probably prove less important than the politics.
Turkey matters in geopolitical terms. Straddling Europe and Asia, it has NATO’s second-largest army after the US. The Turks are not only central players in neighboring Syria, where their forces control the area across the border, but in the European Union’s strategy for avoiding a repeat of the huge influx of Middle East refugees of several years ago.
During the cold war, Turkey was a linchpin of the Western alliance: a majority-Muslim country which, after the fall of the Ottoman Empire, became a secular republic under its founder, Mustafa Kemal Atatürk. In the decades that followed, a kind of fractious democratic balance emerged, punctuated by periodic stints of intervention by the army, which saw itself as the guardian of stability, Atatürk’s secularism, and close ties with the West.
Mr. Erdoğan, in power since 2003, has reshaped Turkey. Though his political roots were in a banned Islamist party, he has ruled less as an Islamist than a populist-nationalist firebrand. Since a failed army coup in July 2016 and his ascendancy to the presidency, he has increasingly concentrated power in his own hands, purged the army, arrested thousands of alleged enemies as well as journalists, and moved to take control of all the reins of the economy. One factor in Turkey’s financial crisis has been his opposition – shared by his son-in-law, whom he has put in charge of the economy – to an almost universally accepted fiscal response to rising inflation: an increase in interest rates.
Yet just as Turkey’s economic woes predate the tariffs, its political relationship with the US and other Western countries has been fraying for some time. In northern Syria, Turkey has been seeking to expel the Kurdish forces, trained and armed by the Americans and indispensable in defeating ISIS. Erdoğan sees them as allies of the PKK, the mainstay of Kurdish insurgency inside Turkey since the 1980s. He also angered Washington and other NATO allies late last year by signing a $2.5-billion deal to buy missile defense from Russia.
The most likely route to de-escalation of the latest US-Turkey conflict would be a face-saving formula under which Turkey sends home the detained American minister, Andrew Brunson. But there seems no sign of that yet. Speaking last Friday, Trump ridiculed the idea Mr. Brunson was getting a fair trial and said Washington would not take his continued detention “lying down.”
Erdoğan is blaming the country’s economic crisis on Western governments, bankers, and financial institutions. “We know your shenanigans, and we will defy you,” he told his party’s congress over the weekend.
The open question is whether, and how, he will follow through on that threat. Economically, his options are limited. A pledge of $15 billion from Qatar last week did briefly stabilize Turkey’s currency fall. But while a tilt towards closer ties with Russia and Iran – both with key roles in Syria – might be tempting as a response, neither country can offer him the financial support needed to deal with Turkey’s enormous debt.
The more serious prospect would involve practical measures on the ground. A concern for Europe is the deal reached in 2016 under which around 3 million refugees from Syria are now in Turkey, with EU funding – a response to the arrival of around 1 million through Greece and into other European countries during 2015. Erdoğan has threatened before to renege on the deal and reopen the refugees’ access to Europe: a political and logistical nightmare for Europe’s leaders.
For NATO, one potential issue is continued access to the airbase at İncirlik in southern Turkey, a key strategic asset during the cold war which allied aircraft have continued to use for Middle East operations, including the fight against ISIS. For the roughly 2,000 American troops still in Syria, there could be an additional question mark over the delicate coordination arrangements that have so far forestalled a full-scale Turkish campaign to drive America’s Kurdish allies out of the country.
All of that is yet to be determined. Yet should the tariff dispute further escalate US-Turkish tensions, one thing at least does seems certain. It would add to the already-difficult challenge of finding a stable arrangement for Syria’s future, especially given Trump’s desire to bring US troops there back home.