US mulls sanctions relief for Turkey

The US may lift economic penalties it imposed on Turkey following the release of a detained US pastor last week, US secretary of state Mike Pompeo said today.

The US administration doubled to 50pc the tariff on steel imports in August, citing the depreciation of the Turkish lira and amid strained political relations between the countries related to the detention of US pastor Andrew Brunson. The US also had placed two Turkish cabinet members on the US sanctions list.

"The fact that pastor Brunson made it back opens up new opportunities," Pompeo said following his meeting with Turkish president Recep Tayyip Erdogan in Ankara. "Some of the sanctions put in place were directly connected to Brunson, and there is a logic" in removing them, Pompeo said.

President Donald Trump will make the final determination, he said.

Turkish steelmakers are optimistic that reducing the tariff back to 25pc could re-open the US market to Turkey steel exports.

Pompeo also said he and Erdogan discussed the impact of US sanctions on Iran that will go into effect on 5 November.

"Turkey is buying Iranian oil, and we would like them to buy less," he said. "And there are a handful of issues around that and we made a little bit of progress on that."

Pompeo's remarks are the latest confirmation that the administration no longer seeks a total cutoff in imports from Iran. But it is still unclear what metric will be used to judge whether buyers of Iranian oil have reduced their purchases sufficiently to qualify for a waiver from US sanctions.

Turkey also imports natural gas by pipeline from Iran, and Ankara said it would not be able to meet peak winter demand if Iranian flows were to halt. Natural gas has for now not been included in US sanctions on Iran. But Washington is demanding that Turkey and other importers of Iranian gas dock payments in local banks to cut off Tehran's foreign exchange earnings, creating uncertainty over the future supply.

Pompeo was in Turkey to discuss US efforts to press Saudi leaders to explain the disappearance of Washington-based Saudi journalist Jamal Khashoggi, who has not been seen in public since he entered the Saudi consulate in Istanbul on 2 October. Pompeo said that Erdogan told him "the Saudis cooperated with the investigation and they are going to share information they got from the Saudis." Ankara has not provided a readout of the meeting yet.