Trump’s Venezuela gold sanctions could hit Turkey hard

A sanctions order signed by U.S. President Donald Trump on Thursday may reignite tensions with Turkey during a difficult year for U.S.-Turkish relations.

This time the sanctions target Venezuelan gold exports under the administration of the left-wing President Nicolas Maduro. The robust sanctions, which Reuters reported ban U.S. citizens from dealing with entities or individuals involved with “corrupt and deceptive” gold deals from the country, may well result in a body blow for Turkey, one of Venezuela’s main customers.

“Venezuela exported 23.62 tonnes of gold worth $900 million to Turkey in the first nine months of this year, compared with zero in the same period last year,” Steve Holland and Roberta Rampton’s story in Reuters reported, citing Turkish official figures.

The trade with Ankara, Turkish newspaper Hürriyet reported in July, was being done specifically to avoid U.S. sanctions. Moreover, the gold trade, and the reciprocal shipments of Turkish goods to the cash-strapped country, are playing a vital role in keeping Maduro’s government afloat, a Bloomberg report said in October.

In fact, trade has blossomed with Venezuela to the extent that MÜSİAD, one of Turkey's largest business associations, has opened offices in the Venezuelan capital city of Caracas.

Turkey is therefore one of the countries likely to made most uneasy by Trump’s latest move, which U.S. national security adviser John Bolton introduced on Thursday as part of a strategy to counter the three left-wing administrations in Cuba, Nicaragua and Venezuela.

“The troika of tyranny in this hemisphere - Cuba, Venezuela and Nicaragua - has finally met its match,” Reuters quoted Bolton as saying.

This would not be the first time this year that Turkey has run afoul of the United States for trading with a country Washington deems off limits.

In January Turkish banker Mehmet Hakan Atilla was found guilty of helping run a scheme to break U.S. sanctions on Iran. The state run-bank he was an executive at, Halkbank, is still expecting a hefty fine for its role in the scheme.

The Turkish Justice and Development Party (AKP) administration has remained defiant on the issue, questioning the right of the United States to dictate who trades with whom. Turkish Foreign Minister Mevlüt Çavuşoğlu has held a consistent line rejecting the new round of U.S. sanctions on Iran, which are due to begin in November. U.S. officials including Trump have warned Turkey will face repercussions if it does not toe the line.

Another issue that caused severe strain on U.S.-Turkish relations was Turkey’s imprisonment of U.S. Pastor Andrew Brunson. Trump placed sanctions on two Turkish ministers he said were involved in the pastor’s arrest in August, and the Turkish economy was hit hard as the rift deepened. It has shown some signs of recovery since the pastor was returned to the United States in September.