The U.S.-Turkey Stand-off in Context

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A Socialist Project e-bulletin ... No. 1665 ... September 13, 2018

The U.S.-Turkey Stand-off in Context:
The U.S. and the Weaponization of Global Finance

Vassilis K. Fouskas and Bülent Gökay

Turkey was thrust into a full-blown currency crisis when U.S. President Donald Trump hoisted tariffs on Turkey’s steel and aluminium exports to the USA, the country’s most serious crisis since Recep Erdogan’s AKP came to power 16 years ago. The Lira lost more than 40 percent of its value, albeit its most recent humble recovery. The pretext for Trump’s punishing attack on Turkey is the continued detention of the evangelical American Presbyterian missionary Andrew Brunson, described by Trump as a "fine gentleman and Christian leader," who was arrested in October 2016 on charges of espionage accused of involvement in the attempted coup of July the same... year.

At first sight, the US-Turkey stand-off appears to be a uniquely Turkish problem triggered by a very public confrontation between two leading members of the "ring of autocrats" of the twenty-first century, Donald Trump and Recep Tayyip Erdogan, and worsened by the idiosyncratic and often misguided economic approach of both leaders. This is not the case.

In the first place, the roots of the conflict are domestic. Public agitation over the fate of Brunson serves Trump’s domestic political agenda, appealing to his Christian right base that considers Brunson a martyr: Trump is using it for its own political benefit for the forthcoming US mid-term elections, where evangelical turnout will be crucial for Republicans holding on to the Senate. Similarly, Erdogan aims at strengthening his domestic support base by appealing to Turkish pride and nationalism at a moment when Turkey and the US have diverging agendas in Syria and other conflicts in the greater Middle East, witness the rapprochement between Turkey, Russia and Iran.

However, the underlying motives for the drive to bring the Turkish economy to its knees lie in the bid by the US hegemon to displace and off-load its own crisis onto the back of emerging economies, by means of trade restrictions, economic sanctions, direct confrontation, and most importantly using the dollar’s reserve currency status to hit the currencies of all emerging economies and beyond.

This is not rooted in the personality or psychology of Trump or Erdogan, and this is not just Turkey’s problem. It is a global problem carrying substantial risks of contagion, and hence conflict and war, in Asia, Latin America, Africa and Europe. Currently, the Turkish crisis looks the most vivid but, as we shall see below, there is much more going on between the USA and the rest of the world.

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