Trump's Syria withdrawal shakes up an already unstable region

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      By Emerging Markets Debt TeamEaton Vance Management

      Boston - The move by President Trump to withdraw U.S. forces from Syria is already remaking the balance of forces in the country's northeastern region. Turkey's invasion followed on the heels of Trump's now-infamous phone call with Turkish President Recep Erdogan two weeks ago.

      The Turkish government wants to create a "safe zone" in the area, where it can resettle up to 2 million Syrian refugees currently in Turkey. Kurdish forces, who were steadfast in supporting the U.S. in the battle against the Islamic State, have struck a deal with Syria's Bashar al-Assad to defend themselves.

      Erdogan said the Turkish military had taken control of the strategic M4 highway after pushing more than 20 miles into Syria. The road runs parallel to the border with Turkey and was one of the main supply lines for Kurdish forces. Meanwhile, Russian forces began patrolling the line between the Turkish and Syrian armies in the border city of Manbij, filling the void created by departing U.S. troops.

      Trump has been showered with criticism from all corners, including members of his own party and the military, for abandoning our Kurdish allies and leaving a power vacuum in the region that will benefit Assad, Russia and Iran. On Wednesday, the House passed a bipartisan resolution opposing Trump's decision to withdraw troops. Democrats and Republicans are urging the administration to take steps to contain the fallout.

      On Monday, Trump authorized sanctions against several Turkish officials and agencies who were said to be "contributing to Turkey's destabilizing actions in northeast Syria." The sanctions include financial measures and barring entry to the U.S. Trump also said he's ending trade talks with Turkey and raising steel tariffs to 50%. Trump claims sanctions are the "strongest you can imagine," but trade figures contradict this. Turkish lira rose Tuesday after tariffs were less serious than the market expected.

      Bottom line: We will be monitoring the impact on Turkey and its neighbors as the situation develops. A region already known for being unstable has become even more so.