Turkey fires back with tariffs on US cars, alcohol, cosmetics

Roman Schwartz
August 16, 2018

The U.S. and Turkey remained locked in a stalemate that has jolted global markets, as the White House said new tariffs on Turkish goods would remain and President Recep Tayyip Erdogan received a financial lifeline from Qatar that should buy him time in the standoff.

Washington´s move came during an ongoing dispute over Turkey´s holding of an American pastor for two years.

Turkey announced Wednesday it is increasing tariffs on imports of certain USA products, escalating a feud with the United States that has helped trigger a currency crisis.

The Turkish government doubled its tariffs on imports of American cars and alcoholic beverages to 120 and 140 percent, respectively, CNN reported. Tariffs were also doubled on goods such as cosmetics, rice and coal.

The decision shows Turkey giving a proportionate response to American "attacks" on the Turkish economy, Vice President Fuat Oktay said in a tweet.

After a more than 8% rise in the Turkish lira versus the U.S. dollar on Tuesday, the unit continued its rally on Wednesday as authorities took measures to curb bets against the currency.

The currency lost almost 40 percent against the dollar this year, driven by worries over President Erdogan's growing influence on the economy and his repeated calls for lower interest rates despite high inflation.

Qatar's emir headed to Turkey on Wednesday for talks with President Tayyip Erdogan who is dealing with a collapse of the lira currency and deteriorating relations with the United States.

Apart from Apple's iPhone, Erdogan did not target specific electronic devices and didn't say how the boycott would be enforced.

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An evangelical from North Carolina, he has been held in Turkey for almost two years over alleged links to the outlawed Kurdistan Workers Party and the Gulenist movement, which Turkey blames for a failed coup in 2016.

According to the sources who spoke on condition of anonymity, Merkel also underlined her country's concern for a strong Turkish economy, repeating her Monday comments that Turkey's economic prosperity "serves Germany's interests".

According to Bloomberg calculations, Turkey's new tariffs affect goods that accounted for US$1 billion of imports a year ago, similar to the value of the metals subjected to higher USA taxes. Asked what the USA would view as progress in resolving the dispute, she replied, "Progress is having Pastor Brunson on a plane, coming back to the United States".

Speaking to reporters in Washington, White House spokeswoman Sarah Sanders also made clear that the United States had no plan to remove the steel tariffs if Brunson were released though it could remove those imposed on two senior Turkish officials.

A White House official warned on Tuesday of additional economic sanctions or other pressures if Turkey continues to refuse to release Brunson.

"If we postpone our investments, if we convert our currency to foreign exchange because there's danger, then we will have given in to the enemy", he said.

On Wednesday, a Turkish court rejected his latest appeal to be released from house arrest.

Last week Trump said he was doubling tariffs on metal imports.

The clergyman is at the center of heightened tensions between North Atlantic Treaty Organisation allies, Turkey and the U.S. Brunson's lawyer told Reuters that the appeal could be heard sooner that the usual three to seven days.

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