ISTANBUL — A worsening dispute between the United States and Turkey reverberated through the global economy on Friday, hastening a broad flight of money from emerging markets and sowing instability throughout the Middle East as relations between the NATO allies neared a breaking point.
The immediate crisis — accelerated by a hostile tweet from President Trump — flared over Turkey’s continued detention of an American pastor, Andrew Brunson, who was jailed 21 months ago in a widespread crackdown after a failed coup in Turkey.
But the outsize effect reflected deepening concerns over Turkey’s economic management by President Recep Tayyip Erdogan, who was re-elected in June with near-authoritarian powers. It also increased the risk that the problems in Turkey, which borders Iran, Iraq and Syria, could destabilize economies well beyond the region.
Turkey’s economy is only the 17th largest in the world, but its problems are worsening as Mr. Trump’s trade war is rattling global commerce, damaging longtime alliances and threatening economic growth worldwide.