Saturday, 23 February, 2019

USA tariffs hike adds to Turkey's economic problems

Turkish lira update market drop Turkish lira Dow Jones drops 200 points after Turkey currency fears
Melinda Barton | 12 August, 2018, 22:25

On Aug. 10, the lira, which had already lost more than a quarter of its value against foreign currencies in 2018, tumbled to a fresh low of more than 6.6 per dollar following U.S. President Donald Trump's decision to double tariffs on aluminum and steel imports from Turkey to 20 percent and 50 percent, respectively.

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

Terming the recent USA tariffs on Turkey as an "economic war", the Turkish president said: "We've seen your game and we will challenge it".

"The United States should know that the only result such sanctinos and pressure will bring... will be harming our relationship as allies", the Turkish foreign ministry said in a statement. He tweeted, "Our relations with Turkey are not good at this time!" United States stocks were also rattled. In relation to this latter dispute, Turkey's continued detention of American pastor Andrew Brunson, who was jailed 21 months ago in a widespread crackdown over a failed coup in Turkey, has increase hostility between the nations. He has denied the charges.

Turkish officials held talks in Washington this week but there was no breakthrough.

As the currency continued to fall, United States President Donald Trump announced on Friday he had doubled steel and aluminum tariffs on his North Atlantic Treaty Organisation ally before admitting that relations between Washington and Ankara were "not very good".

The sanctions will freeze the United States assets of Turkey's minister of justice, Abdulhamit Gul, and its minister of interior, Suleyman Soylu.

Without naming any country, Erdogan said that those - who stand against Turkey for the sake of small calculations - would pay the price. "Relations with countries who behave like this have reached a point beyond salvaging", said Erdogan, who warned of "economic war".

"If you advance upon us by the dollar, we will look for other means to carry on our business", he added.

In an opinion piece in the New York Times Friday, Erdogan wrote "failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies".

Calling on the US, Erdogan said: "It is a shame".

He reiterated his call on citizens to change US Dollars and Euros for the Turkish Lira in the face of a sharp plunge his country's currency witnessed in financial markets this week.

Brunson was arrested in October 2016 on charges of being an American spy and terrorist complicit in the failed coup attempt against Erdogan in the summer of 2016.

Turkey will "never accept the order, which declares war against the whole world", through the threats of sanctions, he said, referring to the U.S.