Mnuchin Says U.S. Weighing Turkey Sanctions Over Missile System

(Bloomberg) -- Treasury Secretary Steven Mnuchin said the U.S. is considering sanctions on Turkey over its purchase of the Russian-made S-400 missile defense system.

“We’re looking at that,” Mnuchin said Monday at the White House in response to a reporter’s question. “I’m not going to make comments on any specific decisions, but we are looking at it.”

Members of the U.S. House Foreign Affairs Committee have urged President Donald Trump’s administration to sanction Turkey over its purchase of the missile system. The U.S. has already said it would bar Turkey from the F-35 fighter jet program over the move.

The Turkish lira dropped as much as 0.9% after Mnuchin’s remarks.

The U.S. has long said Turkey’s move is incompatible with its role in both the North Atlantic Treaty Organization and the F-35 jet program, though Trump has also signaled he’s reluctant to put more sanctions on President Recep Tayyip Erdogan’s government.

In June, the U.S. said it is suspending Turkey from a joint-production agreement to buy and help build the Lockheed Martin Corp. F-35. Turkey was expected to purchase about 100 of the stealthy next-generation fighters.

Trump says former President Barack Obama left Turkey no choice but to buy the Russian system because the U.S. never made a good enough offer to sell an American-made system instead.

In fact, the U.S. has sought to sell Ankara the Patriot air-defense missile since at least 2013, but Erdogan insisted that it come with a transfer of technology so that Turkey could develop and build its own missiles. The Obama administration declined.

To contact the reporters on this story: Josh Wingrove in Washington at jwingrove4@bloomberg.net;Saleha Mohsin in Washington at smohsin2@bloomberg.net

To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Justin Blum, Joshua Gallu

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