Tuesday, 21 August, 2018

Trump doubles steel and aluminum tariffs on Turkey

President Trump’s sanctions saw the Turkish lira plummet to a dangerous low President Trump’s sanctions saw the Turkish lira plummet to a dangerous low
Melinda Barton | 11 August, 2018, 17:53

Relations between Washington and Turkish President Recep Tayyip Erdogan also have worsened because of the detention of three locally employed USA consular workers, trade matters and differences over Syria.

Trump tweeted that he had authorized the doubling of steel and aluminum tariffs "with respect to Turkey". In addition to the steep drop in the Turkish Lira, which effectively reduces the impact of the tariffs, the USA has so far been unsuccessful in persuading Turkish President Recep Tayyip Erdoğan to release US pastor Andrew Brunson. The White House thought that Turkey had agreed to release the pastor in exchange for Israel's release of a Turkish woman that had allegedly given funding to Hamas. "Turkey has been trending towards authoritarianism & becoming more anti-American".

The tumble in Turkey's currency on Friday signaled deepening pessimism about the country's economy after months of market declines.

Washington has demanded the pastor's release and imposed financial sanctions on two Turkish ministers and warned of additional measures.

The lira was trading at 5.95 to the dollar, a loss on the day of 7.5 percent.

But it's unclear exactly how Turkey is threatening national security.

Turkish President Recep Tayyip Erdogan addresses his supporters in Bayburt, Turkey, Aug. 10, 2018.

Now at a new record low, Turkey's currency has lost more than 40% this year.

Turkish President Recep Tayyip Erdoğan struck a defiant note in a series of Twitter messages shortly before Trump's announcement.

Some economists were less impressed by the government's handling of the crisis.

Relations between the U.S. and Turkey have not been helped by Turkey jailing an American citizen for an alleged attempted coup in 2016. "Relations with countries who behave like this have reached a point beyond salvaging".

Meanwhile, Ankara is wanting the extradition of Fethullah Gulen, a Pennsylvania-based cleric who is blamed by Mr Erdogan for masterminding the 2016 coup.

Erdogan's claim of a Western political plot against him sparked alarm in investors and prompted an acceleration in the currency sell-off. In Europe, where exposure to Turkey is far higher, Germany's DAX fell by 1.7% and France's CAC by 1.2%.

The lira, which has lost a third of its value this year, fell on his comments and was trading at around 6.05 to the dollar after he spoke, almost 9 percent weaker on the day.

Turkish President Recep Tayyip Erdogan spoke before the nation twice on August 10, but the country's currency continued its descent, reaching about 6.4 lire per dollar, a decline of about 14.6 percent.

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 and a close ally of the United States.

"This is a national, domestic battle". "We will not lose the economic war", state-run TRT Haber television quoted Erdogan as saying.

The Russian ruble this week plummeted to its lowest level against the dollar since 2016 as the United States said it was imposing more sanctions on Moscow over a chemical attack in the UK earlier this year. "Immediately give these to the banks and convert to Turkish lira and by doing this, we fight this war of independence".

The Turkish president his indicated possible support from Beijing and Moscow, but analysts are skeptical, given the scale of support the Turkish economy needs.