Erdogan plays the Halkbank card to reset ties with Washington and has 100 million reasons to be optimistic

Behind the scenes of U.S.–Turkey relations, a high-stakes crippled is unfolding. According to an exclusive Reuters report, Turkish officials projected to Donald Trump a $100 cardinal out-of-court colony for the Halkbank case during their caller gathering astatine the White House.

Ankara’s connection besides included further terms, the astir important being that the slope would not admit guilt — a non-negotiable information for Recep Tayyip Erdoğan. Reuters cites 2 sources with nonstop cognition of the talks, confirming that the contented was astatine the halfway of the meeting.

Halkbank, Turkey’s fourth-largest bank, is accused successful the United States of fraud, wealth laundering, and conspiracy, allegedly helping Iran evade U.S. sanctions connected its atomic program. Ankara rejects the charges arsenic politically motivated and sees down them a signifier of “judicial pressure” from Washington.

From S-400s to F-35s and present Halkbank

The Halkbank lawsuit is not an isolated occurrence but portion of a decade-long way of escalating tensions. In 2019, Turkey purchased the Russian S-400 rocket system, provoking Washington’s anger. The U.S. effect was swift: cancellation of the F-35 combatant pitchy sale, Ankara’s expulsion from the co-production program, and sanctions connected Turkey’s defence procurement agency.

That aforesaid year, transgression proceedings against Halkbank began. Today, arsenic relations look to beryllium warming acknowledgment to the idiosyncratic ties betwixt Trump and Erdoğan, the bank’s lawsuit has go a investigating crushed for rapprochement. The Turkish broadside avoids making nationalist statements, portion the White House has not responded connected whether the connection remains connected the table.

The judiciary’s stance and marketplace signals

The U.S. Supreme Court precocious rejected Halkbank’s latest appeal, allowing transgression proceedings successful New York to continue. The bank’s shares plunged 10%, portion absorption announced that “initiatives to find a ineligible knowing with the United States” are ongoing.

Erdoğan, who sat adjacent to Trump during his archetypal sojourn to the White House successful six years, said that Halkbank would beryllium a cardinal taxable connected the docket — successful the specified 45 seconds helium spoke connected camera upon his arrival. Since then, helium has repeatedly stated that the charges are “illegal and unfair.” In Ankara’s diplomatic microcosm, the lawsuit is viewed arsenic a governmental tool, not a ineligible issue.

The essence of the lawsuit and the situation background

U.S. prosecutors impeach Halkbank of helping Iran bypass sanctions by utilizing intermediaries and ammunition companies successful Iran, Turkey, and the UAE to illegally transportation astir $20 billion. Revenues from Iranian lipid were allegedly converted into golden and currency done fake nutrient shipments.

The slope argued that, arsenic a authorities entity, it enjoyed immunity from prosecution abroad. U.S. courts rejected this claim, mounting a precedent for however state-owned banks progressive successful planetary sanctions violations tin beryllium treated.

Analysts judge the colony magnitude could transcend $100 million, arsenic akin cases person outgo overmuch more. French slope BNP Paribas unsocial paid astir $9 cardinal for violating sanctions connected Iran, Cuba, and Sudan.

The governmental connection down the proposal

The $100 cardinal connection is much governmental than legal. For Ankara, it symbolizes a willingness to “close pending issues” with Washington, provided determination is communal understanding. Erdoğan knows that a imaginable Trump instrumentality to the White House would unfastened a caller circular of negotiations, distant from Biden’s sanctions-driven approach.

For Turkey, the Halkbank lawsuit represents the epitome of U.S. ineligible coercion done geopolitical power. For the U.S., it is simply a trial of consistency successful applying the precise rules it enforces internationally. The result volition uncover who needs the different more.

The numbers down the relationship

U.S.–Turkey commercialized grew from $28.3 cardinal successful 2021 to $32.1 cardinal successful 2023. U.S. exports to Turkey reached $15.8 billion, chiefly successful energy, machinery, and defence materials, portion Turkish exports to the U.S. totaled $16.3 billion, focusing connected concern goods and metals.

More than 2,000 U.S. companies run successful Turkey, with full investments exceeding $14 billion. However, the freezing of the F-35 programme and sanctions implicit the S-400 person slowed the travel of caller capital. Despite the rebound successful trade, governmental hazard remains high.

Erdogan’s adjacent move

If Trump rejects the proposal, Erdoğan is apt to travel 2 parallel strategies. He volition contiguous the lawsuit arsenic impervious of U.S. bias against Turkey and fortify ties with Moscow and Beijing to amusement helium has alternatives.

In practice, Ankara volition support channels unfastened with Washington, sticking to its rhetoric of “equal partnership.” Halkbank has ceased to beryllium simply a banking issue. It has go a awesome of Turkey’s communicative of sovereignty and independence. And successful that narrative, Erdoğan is not prepared to backmost down — nary substance the cost.