Turkish president Erdogan has decided that the best way to respond to Trump's threats is with threats of his own, and on Thursday, Erdogan said that Turkey will retaliate against any U.S. sanctions imposed when it takes delivery of the Russian S-400 missile-defense system from Russia, refusing to back down from a dispute that has roiled the NATO alliance.
"We would have our own sanctions against them,” Erdogan said in a meeting with foreign journalists on Thursday, without elaborating. While relations with U.S. President Donald Trump “are really good,” he said, “our ties with people working under him are far more different."
Additionally, ending any debate over whether Turkey will terminate the deal with Russia as Congress has demanded, he said that delivery of the S-400 missile system to Turkey may start in the first half of July and the Turkish military has already decided where to deploy it.
Additionally, Bloomberg quoted two Turkish officials familiar with the deal said the missiles could arrive as early as the first week of July.
The planned purchase has resulted in fresh threats of U.S. penalties that could cripple the ailing Turkish economy similar to what happened last summer, while creating severe strains between Washington and a crucial Middle East partner that relies on it for arms.
The Pentagon has argued that integrating the Russian system into NATO’s second-largest army could help Moscow gather critical intelligence on the stealth capabilities of American F-35 fighter planes, which Turkish manufacturers help to build. Erdogan dismissed the U.S. argument and said Turkish military experts were good at deciding what to purchase. He plans to discuss the S-400 purchase with Trump at the Group of 20 summit in Japan this month, and is counting on their personal rapport to fend off stinging sanctions, despite vigorous opposition to the missile deal in Congress.
Washington has warned that Turkey would be expelled from Lockheed Martin Corp.’s F-35 program and face sanctions under two pieces of legislation that allow the punishment of entities doing business with parts of the Russian state.
Erdogan responded in typical fashion, saying “it’s not the end of the world” if Turkey can’t get F-35 fighter jets from the U.S. “Turkey can purchase similar jets from other countries in the world,” he said, clearly referring to the rising China-Russia axies, while warning that "We will get our money back first through international arbitration." Turkish companies were set to produce parts worth billions of dollars for the jet, and the air force planned to buy about 100 of the planes. Deliveries of F-35 equipment to Turkey have been suspended.
As Bloomberg notes, Turkey has dug in on buying the Russian missile-defense system because trust in Washington has broken down on multiple fronts in recent years, and because Ankara is convinced the U.S. can’t replace it strategically with another ally, people familiar with official thinking have said. The U.S. views Turkey’s grievances much differently.
News of Turkey's proposed retaliation did not help risk sentiment, and with the lira trading near session highs on the day following Powell's dovish reversal, the headline sent the TRY plunging by as much as 14 big figures as a bevy of stops were taken out, sparking a mini flash crash, before stabilizing near 5.78