Donald Trump announces 'doubling' of tariffs on steel, aluminum from Turkey

Roman Schwartz
August 11, 2018

The currency's drop - 41 per cent so far this year - is a gauge of fear over a country coming to terms with years of high debt, global concern over President Recep Tayyip Erdogan's push to amass power, and a souring in relations with allies like the U.S.

Trump struck a vengeful note, announcing, "I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong our very strong Dollar!"

But the trade minister, Ruhsar Pekcan, said: "We implore President Trump to return to the negotiating table". The president launched his steel and aluminum tariffs on the grounds that maintaining a robust domestic metal industry was a core national-security interest of the United States, and that competition with metal imports was threatening to drive said industry into extinction.

Erdogan replied that Turkey will not back down despite Trump's sanctions policy and said he would answer with mirror retaliation.

Turkey's currency sank to record lows on Friday amid panic about the country's economic health and souring relations with the United States.

Turkey's lira plummeted as much as 18 percent on Friday as worries about President Tayyip Erdogan's influence over monetary policy and worsening US relations snowballed into a market panic.

He urged Turkish citizens to immediately exchange their gold and dollars for lira.

Turkey's embattled lira on Friday hit new record lows against the USA dollar and euro, losing over seven percent in value as strains with the United States showed no sign of abating and fears grew over the exposure of European banks.

Observers have noted how fighting for Mr Brunson's cause is likely to be popular with Mr Trump's evangelical base ahead of crucial mid-term elections this November. "You will not make money at the expense of Turkish people".

All decisions about the way forward rest with Erdogan, and thus far, he seems undaunted.

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Adding to investors' concerns, Erdogan pledged a continuation of his debt-fueled construction policy to boost the economy, which is blamed for Turkey's rampant inflation and has added to currency weakness. Brunson was among many foreign nationals detained by Turkish President Erdogan in the wake of a failed 2016 coup attempt. USA stocks were also rattled.

The Brunson dispute triggered the collapse in the Turkish currency as investors feared US financial sanctions.

-Turkish relationship, a deterioration made worse by Turkey's worsening human rights record and increased cooperation with Russian Federation and Iran in Syria.

The latest escalation came as Turkey's Economy Minister Berat Albayrak, who is Erdogan's son-in-law and a trusted lieutenant, unveiled what was touted as a new economic plan, pledging Central Bank independence, tighter budget discipline and sustainable and healthy growth.

The currency turbulence coincides with the most bitter dispute with the United States since the 1974 Turkish invasion of Cyprus, which so far shows no sign of abating.

The lira stumbled even more as Erdogan delivered a wild speech to supporters about the plunging currency, encouraging Turks to buy it up.

The lira weakened 20% to dollar after his tweet.

The US on August 1 imposed financial sanctions on its North Atlantic Treaty Organisation ally, blocking Turkey's ministers of justice and interior from doing business with Americans. Turkey's energy minister announced on August 8 that Turkey will keep buying liquid natural gas from Iran in violation of USA sanctions.

Relations are also tense because of new U.S.

A combination of factors, according to experts, have led to fears the country is sliding into an economic crisis. The president - instead of reassuring the markets, whose collapsing confidence is one of the main drivers behind the lira's unprecedented depreciation - slammed Western countries and accused them of waging economic warfare on Turkey.

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