August 17, 2018 10:30 AM, EDT

US Threatens More Sanctions, Keeping Alive Turkish Crisis

A street vendor offers Turkish flags for sale at a market in IstanbulA street vendor offers Turkish flags for sale at a market in Istanbul on Aug. 16. (Lefteris Pitarakis)

ANKARA, Turkey — Turkey and the United States exchanged new threats of sanctions Aug. 17, keeping alive a diplomatic and financial crisis that is threatening the economic stability of the NATO country.

Turkey’s lira fell once again after the trade minister, Ruhsar Pekcan, said that her government would respond to any new trade duties, which President Donald Trump threatened in an overnight tweet.

Trump is taking issue with the continued detention in Turkey of American Andrew Brunson, an evangelical pastor who faces 35 years in prison on charges of espionage and terror-related charges.

Dashing hopes for a quick solution to the dispute, a Turkish court on Aug. 17 rejected an appeal for the pastor’s release from house detention. Upholding a lower court’s decision earlier this week, it also ruled against lifting a travel ban imposed on Brunson.

Trump wrote in a tweet late Aug. 16: “We will pay nothing for the release of an innocent man, but we are cutting back on Turkey!”

He also urged Brunson to serve as a “great patriot hostage” while he is jailed and criticized Turkey for “holding our wonderful Christian Pastor.”

U.S. Treasury chief Steve Mnuchin earlier said the United States could put more sanctions on Turkey.

The U.S. already has imposed sanctions on two Turkish government ministers and doubled tariffs on Turkish steel and aluminum imports. Turkey retaliated with some $533 million of tariffs on some U.S. imports — including cars, tobacco and alcoholic drinks — and said it would boycott U.S. electronic goods.

“We have responded to (U.S. sanctions) in accordance to World Trade Organization rules and will continue to do so,” Pekcan told reporters on Aug. 17.

Turkey’s currency, which had recovered from record losses against the dollar earlier in the week, was down almost 5% against the dollar on Aug. 17, at 6.09.

Turkey’s finance chief tried to reassure thousands of international investors on a conference call Aug. 16, in which he pledged to fix the economic troubles. He ruled out any move to limit money flows — which is a possibility that worries investors — or any assistance from the International Monetary Fund.

Investors are concerned that Turkey has amassed high levels of foreign debt to fuel growth in recent years. And as the currency drops, that debt becomes so much more expensive to repay, leading to potential bankruptcies.

Also worrying investors has been President Recep Tayyip Erdogan’s refusal to allow the central bank to raise interest rates to support the currency, as experts say it should. Erdogan has tightened his grip since consolidating power after general elections this year.