Trump Restraint on Turkey Sanctions Leaves Congress Wanting More

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15 okt. 2019, 06.37

(Bloomberg) -- President Donald Trump may have vowed “big sanctions” on Turkey over its military campaign in northern Syria, but the penalties imposed by the administration late Monday amounted to a milder punishment than that demanded by U.S. lawmakers of both parties.

The decision arose from a measured approach, according to people familiar with the matter. That strategy, one of the people said, reflected the thinking of Secretary of State Michael Pompeo and Treasury Secretary Steven Mnuchin -- that the threat of sanctions can often deter bad behavior before any penalty is even in place.

“The actual sanctions imposed today are not a big deal, but the U.S. doesn’t actually have to designate entities and individuals to create market crisis,” said Richard Nephew, who served as a sanctions coordinator at the State Department during the Obama administration. Global banks will “see what lawmakers are saying, they’ll see an administration that knows it needs to backtrack and then see a real possibility of Turkish banks being targeted.”

At least initially, though, the Turkish lira barely moved on the news. And Trump’s dispatch of Vice President Mike Pence to Turkey to demand a cease-fire essentially would allow President Recep Tayyip Erdogan to lock in the territorial gains he’s made crossing the Syrian border to seize land held by Kurds who have have been American allies in the struggle against Islamic State.

The sanctions were “hardly crippling, Erdogan called Trump’s bluff,” said Brian O’Toole, a former Treasury official who worked on sanctions.

However a person familiar with Trump’s decision described the penalties as in the middle range of the options.

Lawmakers and diplomats were blindsided by Trump’s announcement last week that the U.S. wouldn’t stand in Erdogan’s way and was withdrawing American troops.

Criticism from both Democrats and Republicans soon followed, and it showed little sign of abating even after the sanctions, authorized in an executive order, were announced.

House Speaker Nancy Pelosi, accused Trump of unleashing “an escalation of chaos and insecurity in Syria.”

“His announcement of a package of sanctions against Turkey falls very short of reversing that humanitarian disaster,” she said in a statement on Monday night.

Kaylin Minton, a spokeswoman for Representative Michael McCaul, a Texas Republican and the ranking member of the House Foreign Affairs Committee, said in a statement: “We appreciate the administration’s planned sanctions, but it does not go far enough to punish Turkey for its egregious offenses in Syria.”

The U.S. demand for a cease-fire rather than a Turkish withdrawal from Syria shows “there is still a definite reluctance to escalate pressure on a NATO ally,” said Michael Greenwald, a former U.S. Treasury official.

The Turkey-Syria episode also underscores Trump’s ambivalence about involvement in foreign conflicts. “Some people want the United States to protect the 7,000 mile away Border of Syria, presided over by Bashar al-Assad, our enemy,” Trump tweeted before the announcement of the sanctions, “I would much rather focus on our Southern Border which abuts and is part of the United States of America.”

The penalties announced on Monday would raise steel tariffs on Turkey back to 50%, the level before a reduction in May, and the U.S. would halt negotiations over a $100 billion trade pact, Trump said in a statement. The administration also sanctioned the Turkish ministers of defense, energy and the interior, Mnuchin said on Monday.

Experts on sanctions say the administration could have imposed restrictions last week if it had wished, and that Trump’s talk of future sanctions was more messaging to satisfy frustrated lawmakers who may have a veto-proof majority to pass legislation and force the president’s hand.

“I am fully prepared to swiftly destroy Turkey’s economy if Turkish leaders continue down this dangerous and destructive path,” Trump said in a statement.

“If they knew what they wanted to do, they would have done it already,” said O’Toole, now a senior fellow at the Atlantic Council.

Steel Tariffs

Last year, the administration increased steel tariffs on Turkish imports and then cut them in May to 25%. Despite that reduction, imports from Turkey to the U.S. haven’t recovered. U.S. imports of Turkish steel touched 12,749 metric tons in August, down 88% from the same month a year ago, according to Census Bureau data. Turkey accounted for 1.1% of all U.S. steel imports so far this year.

It wasn’t immediately clear why Trump contended that a new executive order was needed to impose the sanctions.

The president also said he would halt trade negotiations with Turkey, which Commerce Secretary Wilbur Ross announced in a speech in Ankara last month. The deal was to include the furniture, marble, autos and civil aviation industries.

Beyond his efforts to win a cease-fire, Pence said the U.S. wanted a long-term peace. Erdogan contends that the offensive is necessary to push back Kurdish militants and resettle Syrian refugees that now burden Turkey.

But the U.S. troop withdrawal exposed Kurdish militias to attack, risking a resurgence of Islamic State and a slaughter of the Kurds. Kurdish forces that previously fought alongside the U.S. have warned they may no longer be able to secure camps and prisons holding Islamic State jihadists, including Europeans whose home countries don’t want them back.

To contact the reporters on this story: Jennifer Jacobs in Washington at jjacobs68@bloomberg.net;Saleha Mohsin in Washington at smohsin2@bloomberg.net

To contact the editors responsible for this story: Michael Shepard at mshepard7@bloomberg.net, John Harney, Larry Liebert

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