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VOA - Economy

VOA's Dorian Jones in Istanbul contributed to this report.

WHITE HOUSE — The administration of U.S. President Donald Trump is loading "very powerful" sanctions to impose on Turkey for its attacks on Syrian territory, but it is not yet pulling the trigger.

Treasury Secretary Steven Mnuchin announced Friday the president is signing an executive order to dissuade Turkey from any further offensive military action in northeast Syria.

Treasury Secretary Steven Mnuchin takes a question from a reporter after announcing the threat of sanctions on Turkey in the Briefing Room of the White House in Washington, Oct. 11, 2019.

Trump, according to Mnuchin, is concerned about the potential targeting by Turkish forces of civilians, civilian infrastructure, and ethnic or religious minorities.

"Also, the president wants to make very clear that Turkey not allow even a single ISIS fighter to escape," Mnuchin told reporters at the White House.

The Treasury Department is working with the State and Defense Departments to monitor the situation and then recommend to the president at what point the sanctions might need to be instituted, according to Mnuchin, but he did not specify what particular actions would trigger them.

"We are putting financial institutions on notice that they should be careful and there could be sanctions," said Mnuchin.

Asked by VOA what gives him confidence that this announcement will deter Turkey, Mnuchin cryptically replied there have been specific, confidential discussions that have been going on at different levels.

"These are very powerful sanctions. We hope we don't have to use them. But we can shut down the Turkish economy if we need to," added Mnuchin.

Support for sanctions

Prominent members of the U.S. Congress in recent days have advocated for sanctions amid a bipartisan uproar over what was viewed as a green light by Trump to allow Turkey to target the Kurds by moving some U.S. special forces out of the way along the border with Syria.

The Kurdish forces, which Turkey regards as terrorists, have been steadfast allies of the United States inside Syria in helping to destroy the Islamic State caliphate.

Members of the special forces of the Kurdish-led Syrian Democratic Forces (SDF) prepare to join the front against Turkish forces, near the northern Syrian town of Hasakeh, Oct. 10, 2019.

The Kurdish-led Syrian Democratic Forces have been holding thousands of ISIS fighters, and there are fears that in the fresh clashes between the Kurds and the Turks, those detained could escape.

The sanctions pressure from Washington is "a lesson Ankara should learn how few political friends it has in Washington," said analyst Atilla Yesilada of Global Source Partners.

Analysts point out Turkish President Recep Tayyip Erdogan has only focused his attention on Trump, ignoring other political players in Washington.

Proposed legislation from Senators Lindsey Graham, a Republican, and Chris Van Hollen, a Democrat, "are very serious," according to Yesilada.

"They will sanction any Turkish company that sells fuel oil, electricity to the military, and banks that vacillate these transactions. These are broad and pretty meaty sanctions," he added.

The proposed measures also bring back onto the agenda sanctions linked to Ankara's purchase of Russia's S-400 missile system, under Congress' Countering America's Adversaries Through Sanctions Act (CAATSA).

Erdogan and several other prominent political figures also would be individually targeted under the sanctions legislation.

"There is a significant concern in international markets about the risk of sanctions to Turkey," said an analyst for an international bank, who spoke on condition of anonymity.

2018 sanctions

FILE - U.S. pastor Andrew Brunson reacts as he arrives at his home after being released from the prison in Izmir, Turkey, July 25, 2018.

In August 2018, Trump hit Turkey with minor sanctions over the jailing of American pastor Andrew Brunson on terrorism charges. The surprise move saw the Turkish currency collapse, falling around 30%, plunging the economy into recession. It is still recovering.

Analysts warn Turkey's currency is widely seen as being vulnerable to new sanctions. Turkey's corporate sector owes more than $100 billion in foreign currency-dominated debt.

"The Turkish economy is still dead in the water, confidence is still rock bottom," Yesilada said. "The threat of U.S. sanctions is hanging over the head of the Turkish economy like a sword of Damocles and the threat to the Turkish lira."

Threat from Europe

Additionally, Ankara is facing a sanctions threat from Europe. "Obviously it's [sanctions are] on the table," said France's European Union affairs minister, Amelie de Montchalin, on Thursday.

A rapidly escalating war of words is developing between Ankara and the wider European Union over Turkey's military operation in Syria.

Erodgan, on Thursday, threatened to send millions of refugees to the EU if it did not end its criticism.

"Turkey must understand that our main concern is that their actions may lead to another humanitarian catastrophe," EU Council president Donald Tusk said Friday.

"And we will never accept that refugees are weaponized and used to blackmail us. President Erdogan's threats of yesterday are totally out of place."