U.S. Treasury Secretary Steven Mnuchin said yesterday that the Trump administration was considering imposing sanctions on related to Turkey's purchase of the Russian-made S-400 air defense missile system, but no decisions have been made.
"We're looking at that, I'm not going to make any comments on any specific decisions, but we are looking at it," Mnuchin told reporters outside the White House when asked if the Treasury was considering such sanctions. He did not specify any potential targets.
Turkey's dollar-denominated sovereign bonds fell after Mnuchin's comments.
Ankara and Washington have been at loggerheads over Turkey's purchase of the S-400 system, which the United States says is not compatible with NATO defenses and poses a threat to Lockheed Martin's F-35 'stealth' fighter jet.
Russia delivered a second battery of S-400s last month, according to Interfax news agency, which cited Russian Vladimir Putin. Ankara had received its first shipment in July.
Washington has previously warned Turkey that it will face sanctions over the purchase and removed the country from its f-35 program, but Ankara has so far dismissed the warnings.
President Recep Tayyip Erdoğan previously said he did not expect the U.S. to impose sanctions on Turkey over its purchase of the S-400s. Erdoğan said the U.S. should think very carefully before imposing sanctions on Turkey, and if it went ahead with sanctions, Ankara was going to retaliate.
Turkey decided in 2017 to purchase the S-400 system following protracted efforts to purchase air defense systems from the U.S. with no success. However, U.S. officials have advised Turkey to buy the Patriot missile system rather than the S-400 system from Moscow, arguing the Russian system would be incompatible with NATO systems and expose the F-35 to possible Russian subterfuge.
During a G20 meeting with Erdoğan in late June, the U.S. President Donald Trump said that the current situation with Turkey over the F-35 jets was not fair, as the country wanted to buy U.S. Patriot missiles before but Washington refused at the time.