Published: Mon, August 13, 2018
Worldwide | By Gretchen Simon

Trump vows to double steel and aluminum tariffs on Turkey

Trump vows to double steel and aluminum tariffs on Turkey

The lira, he noted on Twitter, "slides rapidly downward against our very strong Dollar!"

Turkey exported $1.04 billion (€0.91 billion) worth of steel and $60 billion worth of aluminum to the United States in 2017, according to the Hurriyet newspaper.

The New York Times suggested that Trump could also be trying to offset the effects of Turkey's weakened currency on the existing tariffs.

Earlier on Friday the lira plunged as much as 14 percent on as worries about Erdogan's influence over monetary policy and worsening US relations snowballed into a market panic that also hit shares of European banks.

Washington imposed the metals tariffs on national security grounds, claiming the glut of steel and aluminum harmed U.S. companies and the economy.

Erdogan said during an address to supporters: "Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks".

The lira tumbled 13% in one day, to 6.51 per USA dollar, a massive move for a currency that will make the Turkish poorer and further shake global investors' confidence in the country.

President Recep Tayyip Erdogan says his government "will not lose the economic war".

Also on Friday, relations between the United States and Turkey have worsened over the fundamentalist Muslim-majority country's detention of American pastor Andrew Brunson, who was arrested by authorities during a post-military coup attempt in 2016.

On Thursday, Mr Erdogan said: "If they have their dollar, we have the people, we have Allah".

The plunge in the value of the currency coupled with an inflation rate of almost 16% could cause a lot of damage to Turkey's economy.

Premier League Top 5 Summer Transfers
But a return of just two points from their opening three home games meant Tottenham were playing catch-up virtually from the off. Real Madrid was already pursuing the Belgium goalkeeper before striking the €35-million ($52.45-million) fee with Chelsea .

Although Erdogan struck a defiant tone, his foreign ministry called for diplomacy and dialogue to solve problems with Washington and Trade Minister Ruhsar Pekcan said "we implore President Trump to return to the negotiating table".

The slump is attributed to the tensions with the U.S. and concerns about President Recep Tayyip Erdogan's control of monetary policy.

UBS chief economist for EMEA emerging markets Gyorgy Kovacs said a giant rate hike of 350-400 basis points would be "consistent with real rate levels that in the past helped to stabilise the currency" but warned a deal to normalise ties with the USA may also be needed.

In 2017, 19 billion dollars worth of goods were traded between the US and Turkey.

The United States hit two high-ranking Turkish officials with sanctions after the Turkish government refused to release imprisoned Christian pastor Andrew Brunson.

Trump's tweet caused a further drop in the Turkish currency, which is now down 13 percent on the day.

The Turkish financial crisis set off a wave of selling across emerging markets, reviving the spectre of contagion that has been the sector's Achilles heel for decades. Relations between the United States and Turkey have been weakening for several reasons.

Independent analysts argue the central bank should instead raise rates to tame inflation and support the currency. "Don't worry", Erdogan told a crowd in the northeastern city of Bayburt.

Turkey, home to the Incirlik air base which is used by US forces in the Middle East, has been a North Atlantic Treaty Organisation member since the 1950s.

The two North Atlantic Treaty Organisation members are at odds on a number of issues - how to fight the Islamic State group, Ankara's plans to buy Russian missile defence systems, and how to punish the alleged plotters of a failed coup in Turkey in 2016.

Like this: