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Turkey's economy suffers amid US sanctions and tariffs

Turkey slaps retaliatory tariff hikes on key US products Turkey's economy suffers amid US sanctions and tariffs
Nellie Chapman | 17 August, 2018, 06:57

Trump's national security adviser, John Bolton, had issued a blunt warning to Turkish ambassador Serdar Kilic when he met him on Monday at the White House, an administration official said on Thursday. "This is regrettable and a step in the wrong direction".

Sanders lamented that Turkey had treated Brunson, "who we know to be a very good person and a strong Christian who has done nothing wrong, very unfairly, very badly".

"We are experiencing unfavourable conditions but we will overcome", he said.

The US and Turkey are also embroiled in a bitter row over the role of Turkish bank Halkbank in skirting sanctions against Iran. Even though the lira has rallied some this week, the markets aren't sharing his faith in Turkey's economy.

Vice President Fuat Oktay wrote on Twitter that the increase in duties were in response to "deliberate attacks on our economy" by the United States administration.

Mr Albayrak, President Recep Tayyip Erdogan's son-in-law, said the country's banks were healthy and strong and the nation would not be turning to the International Monetary Fund.

Turkey's move to increase tariffs on U.S. imports has helped boost its weakened currency.

A decree signed by President Tayyip Erdogan, doubled Turkish tariffs on passenger cars to 120 per cent, on alcoholic drinks to 140 per cent and on leaf tobacco to 60 per cent. Tariffs were also doubled on goods such as cosmetics, rice and coal. "Turkish-Qatari relations are based on solid foundations of true friendship and solidarity", he said.

Erdogan has repeatedly told Turks to exchange gold and hard currency into lira, saying the country was involved in an economic war with enemies.

In response, Erdogan has called for a boycott of United States electrical goods while Ankara has sharply hiked tariffs on some USA goods.

Turkish Finance Minister Berat Albayrak hosted a conference call with global investors on Thursday in a bid to reassure them that policymakers are able to tackle a dip in the Turkish lira.

The lira was trading on Wednesday at 6.02 to the dollar, a gain in value on the day of 5.5 percent.

Markets have been concerned by Erdogan's influence over the economy and his resistance to interest rate increases to tackle double-digit inflation.

Michael Hewson, chief market analyst at CMC Markets UK, warned the Turkish tariff hikes risked provoking a new reaction from Trump and ultimately adding to downward pressure on the lira.

Erdogan has said Turkey needs to find "new friends" because of the row with the its North Atlantic Treaty Organisation ally.

Erdogan thanked the emir and the people of Qatar for "standing by Turkey", the official Anadolu news agency reported.

Albayrak said the country will turn to other partners - such as China and Germany - to help it navigate the current situation.

The leaders engaged in three hours of talks on Wednesday, according to Erdogan's press office, discussing bilateral relations and regional developments.

Earlier on Wednesday, Erdogan spoke on the phone with German Chancellor Angela Merkel, the Turkish presidency.

In another high-profile case, a Turkish court ruled on August 15 to release from jail Taner Kilic, the local chair of Amnesty International, a researcher from the rights group said.

Analysts say Turkey is also likely to seek a more dynamic economic relationship with China and Russian Federation, with whom ties have warmed considerably in recent years.