‘We are cutting back on Turkey’

"We will not surrender to those who present themselves as a strategic partner while at the same time trying to make us a strategic target", Erdogan said at a congress of his ruling Justice and Development Party (AKP).

"They have not proven to be a good friend", Trump said of Turkey during the Cabinet meeting.

In addition to its decision to ramp up tariffs on imports of Turkish steel and aluminium, the Trump administration imposed sanctions on two top officials in Erdogan's cabinet earlier this month as part of its efforts to pressure Ankara into freeing Brunson.

Calling once again for Turkey to release Pastor Andrew Brunson Friday, President Donald Trump had harsh words for the North Atlantic Treaty Organisation ally before leaving the White House Friday for Southhampton, New York.

The Turkish lira plummeted to a record low on Monday, losing almost 40 percent of its value since the start of 2018.

"We have more that we're planning to do if they don't release him quickly", Mnuchin said when asked by President Trump at a Cabinet meeting for an update on USA sanctions on Turkish officials.

Qatar has pledged to inject $15 billion into Turkey's economy to rescue the country amid United States sanctions and financial meltdown.

Trump later said in a tweet the United States "will pay nothing" for Mr Brunson's release, "but we are cutting back on Turkey!"

The spat has caused the Turkish economy to plummet, and on Saturday President Erdogan called the sanctions an "attempted economic coup". Turkish officials and financial sector executives described the USA moves as an "economic war", adding that the volatility in lira does not reflect the state of the country's economy. But Turkey's central bank has been slow to raise rates, and latterly it has taken to not raising them at all: it held the benchmark one-week repo rate at 17.75 per cent in July even as economists were expecting a one-percentage-point increase.

The threat comes as Turkey sought to reassure investors rattled by the sanctions-fueled crash of the Turkish lira, insisting the country would emerge stronger.

The Turkish lira is falling against the dollar on Friday after Mnuchin's statement.

On the same day, Turkey announced it would be increasing tariffs on some U.S. imports.

"Of course, Qatar has more investments in Turkey, worth at least $20bn of investments ranging from media, entertainment, infrastructure and financial services projects".

The sanctions are believed to have further exacerbated economic turmoil in Turkey, which some believe has its roots in misguided economic policies of the government in recent years. In all likelihood, Qatar feels they owe Turkey such help since Turkey came to their aid when Saudi Arabia and its allies imposed a region-wide blockade.

"Turkey has alternatives", he said.

  • Tracy Klein