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Erdogan threatens reprisal against any US missile sanction

President Donald Trump, left, walks with Recep Tayyip Erdogan, Turkey's president, at a NATO summit in Brussels, Belgium, on July 11, 2018.

MARLENE AWAAD/BLOOMBERG

By BLOOMBERG Published: June 20, 2019

Turkey will retaliate against any U.S. sanctions imposed after it takes delivery of a missile-defense system from Russia, President Recep Tayyip Erdogan said, showing no signs of backing off from a dispute that has roiled a critical alliance.

"We would have our own sanctions against them," Erdogan said in a meeting with foreign journalists on Thursday, without elaborating. While relations with U.S. President Donald Trump "are really good," he said, "our ties with people working under him are far more different."

The Turkish leader plans to discuss the S-400 purchase with Trump at the Group of 20 summit in Japan this month, and is counting on their personal rapport to fend off stinging sanctions, despite vigorous opposition to the missile deal in Congress.

The lira dropped as much as 1.6% after Erdogan's remarks, then reversed to trade 0.2% higher at 5.774 per dollar.

Delivery of the S-400 missile system to Turkey may start in the first half of July and the Turkish military has already decided where to deploy it, Erdogan said. Separately, two Turkish officials familiar with the deal said the missiles could arrive as early as the first week of July.

The planned purchase has drawn threats of U.S. penalties that, at their most severe, could cripple the ailing Turkish economy and create severe strains between Washington and a crucial Middle East partner that relies on it for arms, U.S. officials familiar with the matter have said. The Pentagon contends that integrating the Russian system into NATO's second-largest army could help Moscow gather critical intelligence on the stealth capabilities of American F-35 fighter planes, which Turkish manufacturers help to build.

Erdogan dismissed the U.S. argument and said Turkish military experts were good at deciding what to purchase.

Turkey has dug in on buying the Russian missile-defense system because trust in Washington has broken down on multiple fronts in recent years, and because Ankara is convinced the U.S. can't replace it strategically with another ally, people familiar with official thinking have said. The U.S. views Turkey's grievances much differently.

Washington has warned that Turkey could be expelled from Lockheed Martin Corp.'s F-35 program and face sanctions under two pieces of legislation that allow the punishment of entities doing business with parts of the Russian state.

Erdogan said "it's not the end of the world" if Turkey can't get F-35 fighter jets from the U.S. "Turkey can purchase similar jets from other countries in the world," he said. "We will get our money back first through international arbitration."

Turkish companies were set to produce parts worth billions of dollars for the jet, and the air force planned to buy about 100 of the planes. Deliveries of F-35 equipment to Turkey have been suspended.

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