The FINANCIAL -- ISTANBUL — Turkish President Recep Tayyip Erdogan announced retaliatory measures Saturday against the U.S., following the U.S. sanctioning of two senior ministers for the ongoing detention of an American pastor.
Erdogan announced the measures while speaking at a women's party meeting in Ankara. "We have shown patience until yesterday evening. Today I am instructing my friends that we will freeze the assets of U.S. secretaries of justice and interior in Turkey" Erdogan said. "Those who think that they can make Turkey take a step back by resorting to threatening language and absurd sanctions show that they do not know the Turkish nation."
On Wednesday, Washington sanctioned Turkish Interior Minister Suleyman Soylu and Justice Minister Abdulhamit Gul, blocking their access to U.S. assets. The sanctions are for their role in the detention of U.S. Pastor Andrew Brunson.
Brunson was released into house arrest last month after nearly two years in jail. The pastor is on trial for espionage and terrorism charges over alleged links to conspirators blamed for Turkey's 2016 failed coup. Brunson faces up to 35 years in jail.
Washington dismisses the charges as baseless, accusing Ankara of hostage taking.
Erdogan's strong pushback comes as diplomatic efforts are continuing. Turkish Foreign Minister Mevlut Cavusoglu on Friday met his U.S. counterpart, Secretary of State Mike Pompeo, on the sidelines of the ASEAN meeting in Singapore. Both sides described the talks as "constructive."
Brunson's detention is not the only point of tension in U.S.-Turkish relations. Washington's support of a Syrian Kurdish militia in the war against Islamic State is condemned by Ankara, which considers the militia a terrorist group. Ankara also refuses to enforce U.S.-Iranian sanctions. In addition, Turkey's purchase of Russian S-400 missiles is straining ties.
Until now Erdogan had relied on his political relationship with U.S. President Donald Trump to manage bilateral differences. However, local and international reports say a collapse in an agreement to secure Brunson's release has damaged that relationship.
"Ankara has inadvertently painted itself into a corner and has lost it's only asset, President Trump," said former senior Turkish diplomat Aydin Selcen, who served in Washington.
"Why is Ankara not effective in Congress? Because we no longer have the support of the Israeli lobby because we don't enjoy good relations with Israel.Moreover, the Pentagon, because of their support of Syrian Kurds, has hurt relations," said Selcen.
An online report Saturday in Turkey's leading Hurriyet newspaper says the deal between Trump and Erdogan to secure Brunson's release failed over Turkish demands the U.S. end its investigation into the Turkish state-owned Halkbank. After a few hours, the report was removed from the newspaper's website. The newspaper's owner has close ties to the Turkish president.
A New York court earlier this year convicted a senior executive of Halkbank of evading U.S. sanctions against Iran. The U.S. Treasury is considering a fine against the bank, which could be many billions of dollars. Analysts are warning that could hit Turkey's fragile economy.
The deepening U.S.-Turkish tensions are fueling fears of further sanctions by Washington, in particular, targeting Turkey's financial system. Last week Turkish financial markets fell heavily, with the currency hitting record lows.
Erdogan called Friday for the defense of the Turkish currency by converting foreign savings or gold into Turkish liras. The president also announced Turkey had received financial support from China.
Analysts warn such efforts can do little to meet the hundreds of billions of dollars in loans owed by the government and private sector, which are becoming increasingly expensive to pay off with a plummeting currency.
Diplomatic options also could be running out for Erdogan. "Just like [Russian President Vladimir] Putin, Erdogan is an expert at sensing his opponents' weakness and exploiting it," political analyst Atilla Yesilada of Global Source Partners said. "Only by putting up a united front and proposing a credible threat to Turkish interests can one earnestly negotiate with Erdogan. Now that is what we appear to be seeing by Washington."
Observers point out, however, that Erdogan, who portrays himself as a political strongman, will be wary of being seen as bowing to U.S. threats.
In similar predicaments, the Turkish president has double downed, although analysts warn he does not have a strong hand.
"This is not poker, this is chess, and you can't bluff in chess," analyst Yesilada said. "Because both sides can see one another's hands, and Turkey really doesn't have enough pieces to beat the U.S. Whatever it does would bring down twice the retaliation by the United States."
Other analysts suggest Erdogan may be playing neither chess nor poker, but chicken — daring Trump to risk destabilizing Turkey in a region already beset by instability, but in need of Turkey's cooperation to meet U.S. goals.