US Sanctions Worsened, Turkey Reappear Shares Debt Triple Kill

Last year's storm came back. Local time on October 14th, Turkey again surprised the three stocks of debt remittance.

In the face of Turkey's military action against Syria, US President Trump signed an administrative order against Turkey on 14 local time. He said in a statement on Monday that the tariffs on steel in Turkey will be raised to 50%, that is, the level before the tariff cut in May. The United States will also terminate negotiations on the $100 billion trade agreement with Turkey. The US government also imposed sanctions on Turkey's minister of national defense, energy and interior.

After the announcement of Trump's statement, the US dollar rose against Turkey lira for a short time, reaching 5.9385 for a time, expanding to 0.72% in the day, closing to 5.9274, hitting a four month high. Turkey's Istanbul 100 index fell 5.10%, and the dollar bond price due in 2038 fell 0.99 cents.

The Turkey army began to enter northern Syria in October 9th and launched a "peace spring" military action against Kurdish forces. On the 13 day, US Defense Secretary Mark Espe said Trump had ordered the withdrawal of about 1000 US troops from northern Syria to protect them from Turkey's ever expanding attack on Syria.

The rapid progress of Turkey has aroused the condemnation of the international community. Speaking at a regular press conference on October 15th, foreign ministry spokesman Geng Shuang said: China has always opposed the use of force in international relations, and advocated that all parties should abide by the purposes and principles of the Charter of the United Nations and the basic norms of international relations, and solve problems through political and diplomatic channels within the framework of international law. Syria's sovereignty, independence, unity and territorial integrity should be respected and maintained. We call on Turkey to stop military operations and return to the right way to solve political problems.

At the same time, Geng Shuang also said that the anti-terrorism situation in Syria is still grim, and that the military action may lead to terrorist attacks, and the "Islamic state" attempts to make a comeback. "We urge the Turkish side to take the responsibility to work together with the international community in combating terrorism."

The United Nations said in October 13th that more than 130 thousand people had fled from the northern border town of Taylor Abu Jerzy de and Las EAIN in October 13th. The United Nations Office for the coordination of humanitarian affairs also said that with the continuing fighting in northern Syria, the number of civilians needing humanitarian assistance and protection in conflict areas is expected to reach as high as 400 thousand.

Is sanctions a false move?

Many congressmen in the United States condemned Turkey's attack on northern Syria. On October 15th, Democrat Nancy Pelosi, speaker of the house of Representatives, said in a statement, "President Trump has caused chaos and instability in Syria. His package of sanctions against Turkey is not enough to reverse this humanitarian catastrophe.

Faced with criticism from home, Trump has been defending his decision to withdraw troops. At the same time, Trump also gave El a tough talk. He issued a document saying that if Turkey did anything that he thought was "breaking the limit", he would "destroy Turkey's economy thoroughly". But it is doubtful that the US sanctions will be effective.

"The sanctions that Trump just announced seems to be very harsh on the surface, but in fact it is a false move." Li Shaoxian, Dean of the Arabia National Research Institute of Ningxia University, analyzed the news from the economic news reporters in twenty-first Century. First of all, sanctions against Turkey officials included restrictions on the United States and the freezing of assets in the US, but this did not cause damage to the destruction of Turkey's economy. Secondly, the negotiations on the suspension of trade with Turkey actually did not make much progress.

As for the US resumption of 50% tariffs on steel imported from Turkey, Li Shaoxian said, "this really makes Turkey very uncomfortable", but this tariff actually has been added in the last round of sanctions, but it has just been lifted, and now it has to be restored. US official data show that Turkey's steel imports have dropped by 76% in 2018.

Zhou Rong, a senior researcher at Chongyang Finance Research Institute, Renmin University of China, also pointed out to the twenty-first Century economic news reporter that the sanctions announced by Trump just leave room for Turkey.

Why did Trump sacrifice no damage? "In fact, he is still coping with pressure at home and abroad, especially inside." Li Shaoxian pointed out that the US Congress is pushing for sanctions against Turkey. Many Republicans, including many Republicans, strongly object to Trump's withdrawal from Syria, so he needs to give them a hand.

"In October 6th, after the telephone call of Trump and Erdogan, the white house suddenly issued a statement saying that the US military would withdraw from the border between Turkey and Syria, and would not support or be involved in Turkey's military operations. This is actually the United States' green light "for Turkey's military operations, and it has made way. Li Shaoxian thinks.

There are three main considerations in Li Shaoxian's analysis: first, Trump pursued the new Middle East Strategy of "offshore balance", unwilling to invest in manpower and material resources in the Middle East, hoping to completely withdraw from the Middle East, which led to the resignation of Matisse, the former US Secretary of defense. Second, he believed that the Kurdish issue had become the biggest obstacle to the deterioration of the relationship between the United States and the United States. In recent years, Turkey has pushed Turkey step by step into a disadvantageous direction. But in fact, whether it is the United States or NATO, the western countries can not do without Turkey. Third, because of the need for election, Trump hopes to bring the foreign troops back to the country before Christmas, which can give him a lot of domestic politics. As for Trump

Turkey economy walking tightrope

US Vice President Burns warned in October 14th that "US sanctions will continue and escalate unless Turkey can cease fire immediately and stop violence, and agree to negotiate long-term solutions to the Turkish border issue." In addition, the US Congress is also preparing special sanctions against individuals suspected of seriously damaging human rights and disrupting the ceasefire agreement in military operations. Specific measures include economic sanctions, confiscation of property and prohibition of entering the United States.

Liu Min, an analyst at FXTM fortune China market, pointed out to the twenty-first Century economic news reporter that Turkey's economic structure is mainly dependent on the development of epitaxial economy. Its economic development is mainly driven by investment, such as infrastructure and real estate. With the influx of hot money, Turkey's debt pressure is constantly accumulating, its currency is bubbling, inflation is always at risk, and the instability of the system and industrial structure makes Turkey's economy relatively fragile.

"In 2018, the United States issued a threat of sanctions against Turkey, when foreign capital continued to flee Turkey, Turkey lira depreciated against the US dollar by nearly 50%, and the local market suffered a sell-off." Liu Min pointed out that at that time, Lila's sharp fall was not only affected by external factors, but also related to the radical increase in interest rates and the breakdown of the credit bubble.

Lira is much stronger today than it was 14 months ago. In mid August 2018, the Lila exchange rate fell to 6.95 against the US dollar, and since October 1, 2019, the Lila dollar exchange rate has dropped to 5.94 at most. But if the us further tightens sanctions against Turkey, it is likely that lira, which is not easy to stabilize, will be under pressure again.

At present, the main challenge facing Turkey may be bad debts in the corporate sector. JP Morgan said in August that as of July 2019, Turkey had about $179 billion in foreign debt this year, almost equivalent to 1/4 of its economic output in one year. About $146 billion of the debt is owned by the private sector, especially banks. In April, Turkey's finance minister announced a $5 billion plan to help banks cope with rising corporate default rates. But analysts believe that this is not enough to eliminate the huge debts left over by credit driven growth over the past ten years and to avoid new debts arising from long-term economic recession.

"Because the debt problem of Turkey enterprises still exists, therefore, if the US sanctions cause Turkey inflation to continue to rise and lira continues to fall, Turkey's economy may face another recession risk." Liu Min said.

Liu Min stressed that Turkey's economy is still fragile. In October 9th, the world bank published the latest economic news in Europe and Central Asia. This year, Turkey's GDP growth is zero. "All this shows that Turkey's economy is on the brink of recession."