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Deniz, a retired Turkish-American engineer making a family visit to Istanbul, was discussing Turkey鈥檚 plunging lira and crisis-hit economy with a hotel receptionist when the hotel manager interrupted loudly.

鈥淭ell Trump it鈥檚 his fault!鈥� the hotel manager exclaimed, echoing the official narrative that outside enemies are to blame.

The lira has plummeted in value as testy US-Turkey relations have experienced new lows over the fate of an American pastor detained in Turkey, resulting in increased trade tariffs imposed by President Trump.

But analysts say Turkish President Recep Tayyip Erdo臒an is skillfully using the crisis and Mr. Trump鈥檚 harsh words to deflect blame for what is essentially a homegrown economic crisis.

Turkey鈥檚 deep economic malaise and flailing currency are long-standing and largely due to mismanagement by Mr. Erdo臒an and his ruling Justice and Development Party. But they are exacerbated now by a two-week surge in tension and hostile rhetoric between Trump and Erdo臒an, two leaders with authoritarian styles.

In Erdo臒an鈥檚 parlance, Turkey is facing an 鈥渆conomic war鈥� waged by outsiders jealous of the nation鈥檚 progress.

That narrative, analysts say, is making a 鈥渉ard landing鈥� 鈥撀燼nd a painful recession 鈥� all the more likely by undermining confidence that Turkey鈥檚 leadership recognizes its own economic problems and the need for managed austerity, rather than subscribing to political conspiracy theories.

And yet even as Trump vowed Monday to make 鈥渘o concessions鈥� over his demand for the release of evangelical pastor Andrew Brunson 鈥撀爃eld for 21 months on dubious terrorism charges, after living for two decades in Turkey 鈥撀爏ome see signs that both Trump and Erdo臒an are still leaving room to eventually make peace.

鈥淪anctions by the US are helping Erdo臒an frame the economic meltdown so that it鈥檚 not seen as his fault, but as a direct result of economic sanctions,鈥� says Soner 脟a臒aptay, head of the Turkey Research Program at the Washington Institute for Near East Policy (WINEP).

鈥淭urkey鈥檚 strategy at this moment is not to escalate [the conflict with the US], but also not to de-escalate 鈥� they鈥檙e not in a rush,鈥� says Mr. 脟a臒aptay, author of 鈥淭he New Sultan: Erdo臒an and the Crisis of Modern Turkey.鈥�

鈥淎lthough I don鈥檛 think Erdo臒an wants a crisis with the US,鈥� he says, 鈥渙nce he鈥檚 in it, he also knows he has an economic crisis, and so maybe he is making the best use of it, until the moment comes for a reset with the United States.鈥�

'Not a good time to invest'

Anticipation of an unpopular but inevitable economic slowdown, after years of growth-at-all-costs policies fueled by easy credit and vast government infrastructure projects, is widely seen as the reason Erdo臒an chose to call early presidential elections, pushing forward to last June a landmark vote originally slated for November 2019.

Erdo臒an won reelection with a 52.6 percent majority and assumed new, near-unassailable powers that had been narrowly approved in a 2017 referendum.

Yet so far this year the Turkish lira has lost 40 percent of its value against the dollar, building projects have run out of money, and Erdo臒an has refused to let the central bank raise interest rates to curb runaway inflation, as he rails against an 鈥渋nterest rate trap鈥� by imperialist powers. Turkish companies are burdened by hundreds of billions of dollars in debt.

Adding to Turkey鈥檚 woes is fallout over the Brunson case, the latest episode in years of deteriorating relations between the two NATO allies. In July,聽Trump called Mr. Brunson an聽鈥渋nnocent man of faith鈥� who should be released immediately. On August 10, Trump said he would double tariffs on steel and aluminum, tweeting that the steel tariff would hit 50 percent and that US-Turkey relations 鈥渁re not good at this time.鈥�

Erdo臒an responded by slapping new duties on American goods, including a 140 percent tariff on US alcohol, 120 percent on vehicles and 60 percent on tobacco 鈥� and blaming outsiders.

鈥淯S sanctions give the markets the message that it is not a good time to invest in Turkey right now,鈥� 脟a臒aptay says. 鈥淭hey are compounding the impact of the negative downturn in the economy, almost geometrically compounding it, because they come at a time when Turkey鈥檚 economy is already fragile.鈥�

Smartly managed cool-down needed

Sinan 脺lgen, chair of the Center for Economics and Foreign Policy Studies (EDAM), an Istanbul-based think tank, says that what Turkey needs now 鈥渋s a period of cool-down, which needs to be smartly managed by the government, if we want to end up in a soft-landing scenario.鈥�

鈥淭he alternative is a hard landing, which means a deeper contraction and more costly outcome,鈥� says Mr. 脺lgen, adding that he has 鈥渘ot yet鈥� seen signs that officials are taking the correct steps.

鈥淭o regain the confidence of the financial markets, Turkey has to explain that it understands the core problem that it faces, as opposed to the current rhetoric that everything is fine, and this is just an attack by foreigners,鈥� says 脺lgen. 鈥淭he window for a soft landing has not totally disappeared, but it is closing down.鈥�

Rhetoric has been fierce on both sides, with no apparent end in sight. A Turkish court last week rejected the latest appeal for the release of Brunson, who was among tens of thousands of Turks arrested in waves after a failed July 2016 coup aimed at deposing Erdo臒an.

Underscoring the tension, gunfire was aimed at the US Embassy in Ankara Monday. No one was hurt in the incident; two men were later detained.

鈥淲e will not surrender to those who call us a strategic partner and make us a strategic target,鈥� Erdo臒an said this week.

鈥淭hey have dollars, we have our Allah [God],鈥� he said in another speech. 鈥淭hose who could not influence the will of our country through elections at every instance try another method. Those that could not accomplish provocation through a coup are now attempting a coup through money.鈥�

A promise by gas-rich Qatar to invest $15 billion in Turkey has helped stabilize the lira, but economists say Turkey needs to take many more steps on its own for sustained improvement.

Chance of reconciliation

Politically, Trump and Erdo臒an both have a history of taking fierce rhetorical accusations to fever pitch, only to later make up with their foes. For example, North Korean leader Kim Jong-un was 鈥渓ittle rocket man鈥� with a 鈥渟mall鈥� nuclear button until, after a surprise summit in June, Trump said it was his 鈥渉onor鈥� to say he expected a 鈥渢errific relationship.鈥�

Likewise, Erdo臒an eventually came to terms with Israeli Prime Minister Benjamin Netanyahu after the lethal Mavi Marmara ship incident in 2010, in which Israeli commandos killed nine Turks聽on a protest ship trying to run the Israeli blockade on Gaza. Erdo臒an also stepped down from an incendiary clash with Russian President Vladimir Putin after Turkey shot down a Russian jet fighter that had strayed briefly out of Syrian airspace in late 2015.

鈥淚 don鈥檛 rule out an Erdo臒an-Trump make up at all.... Neither has targeted the other in their criticism 鈥撀爐hat鈥檚 really important,鈥� says 脟a臒aptay, the analyst at WINEP. 鈥淏oth are known for their very personal style of doing politics, neither Erdo臒an nor Trump have said anything bad about each other ... which to me suggests that both want and hope for a reset.鈥�

Such a move, he says, would require the release of Brunson, whose freedom Trump states was a quid pro quo he personally agreed on with Erdo臒an at a NATO summit last month, when the two men fist-bumped each other for what Trump said was Erdo臒an 鈥渄oing things the right way.鈥�

For its part, the White House successfully pressed for the release of a Turkish activist held by Israel. But Brunson has yet to be freed.

鈥淚 think they鈥檙e making a terrible mistake. There will be no concessions,鈥� Trump told Reuters, in an interview Monday.

鈥淓rdo臒an may find some face-saving measure that might not be very convincing to the outside world,鈥� says 脟a臒aptay. 鈥淏ut because his supporters control 90 percent of the media in Turkey, they can write the narrative as they like, so that it doesn鈥檛 look like a loss of face for him. It can even look like a win for him, when it is not.鈥�