U.S. redoubles sanctions threat over S-400 as Erdogan vows retaliation

ISTANBUL/BRUSSELS (Reuters) - The U.S. government on Thursday said economic sanctions over Turkey’s planned purchase of a Russian missile defense system remained a “very viable” option, even as Turkish President Tayyip Erdogan vowed to retaliate if that occurred.

FILE PHOTO - Turkish President Recep Tayyip Erdogan attends talks with Iranian President Hassan Rouhani and Russian President Vladimir Putin, during their meeting in the Black sea resort of Sochi, Russia, 14 February 2019. Sergei Chirikov/Pool via REUTERS

U.S. Assistant Secretary of State for Political-Military Affairs Clarke Cooper told reporters on a teleconference that the United States and other NATO allies remained in discussions with Turkey about resolving the dispute.

“Seeking resolution is still within the realm of possible today, but imposition of sanctions remains a course of action and a very viable one at this point,” Cooper said during a visit to Brussels, where NATO is headquartered.

In Istanbul, Erdogan, speaking at a rare news conference for foreign media, repeated that the purchase of Russian S-400 systems was a done deal and said the United States should think carefully before imposing sanctions on a NATO member.

“I do not see any possibility of these sanctions happening,” Erdogan said. However, if they did, “we will have sanctions of our own.”

Washington has repeatedly threatened to impose sanctions unless Ankara backs down from the S-400 purchase. Erdogan said the delivery of the system would start in the first half of July.

His expectation of no sanctions appeared largely based on his personal relationship with President Donald Trump. “I say this very openly and sincerely, our relations with Trump are at a place that I can call really good. ... In the event of any issues, we immediately work the phones,” Erdogan said.

He said he would discuss the issue with Trump at the G20 summit in Japan at the end of June, and that the problem was largely with other U.S. officials. “When we have talks with those below Trump, we see that many cannot agree with our officials, and one example is the S-400,” he said.

Cooper said there was no disagreement among U.S. officials or with other NATO members over the issue.

Turkey and the United States have been at loggerheads over the issue for months. Washington says the S-400 is incompatible with NATO’s defense network and could compromise its F-35 fighter jets, an aircraft Turkey is helping build and planning to buy.

Buying military equipment from Russia leaves Turkey liable to U.S. retribution under a 2017 law known as the Countering America’s Adversaries Through Sanctions Act, or CAATSA.

Turkey faces expulsion from the F-35 program, which would cost Turkish Aerospace Industry (TAI) and other companies well-paying orders, but the sanctions could be extended to other Turkish companies that produce components for U.S. firms.

Even minor U.S. sanctions could prompt another sharp sell-off in the Turkish lira. A 30 percent slide in the currency drove the Middle East’s largest economy into recession last year. It has fallen another 10 percent this year, and markets remain on edge.

Erdogan said Turkey wanted to buy Patriot missiles from the United States but that offer was in no way comparable to Russia’s.

Cooper said the United States and other NATO allies had remained very persistent in offering Turkey alternative missile defense systems, but gave no details on what, if anything, had been done to sweeten the original offers submitted.

Erdogan said Turkey would appeal to international courts and ask for its F-35 payments to be refunded if needed.

Additional reporting by Ali Kucukgocmen and Canan Sevgili in Turkey, and Andrea Shalal in Paris; writing by Humeyra Pamuk; editing by Daren Butler, John Stonestreet and Jonathan Oatis