Published: Mon, August 13, 2018
Global News | By Blake Casey

U.S. to double Turkey tariffs amid decline in relations

U.S. to double Turkey tariffs amid decline in relations

The U. S., the world's biggest steel importer, imposed tariffs of 25 per cent on steel and 10 percent on aluminum in March for imports from a variety of countries.

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

Turkey and the USA are now experiencing rocky relations following Washington's imposition of sanctions on Interior Minister Suleyman Soylu and Justice Minister Abdulhamit Gul for not releasing American Pastor Andrew Brunson, who faces terrorism charges in Turkey.

In response, the Turkish Foreign Ministry vowed to "retaliate" against USA "aggression" over the case of Brunson "without any delay", and called on Washington to reverse its decision.

Mr Trump's tweet caused a further drop in the Turkish currency, which is now down 13% on the day. The president, who says a shadowy "interest rate lobby" and Western credit ratings agencies are attempting to bring down Turkey's economy, appealed to his countrymen's patriotism.

The United States has denied Turkey's request for deporting Fethullah Gulen, a USA -based Turkish cleric who Ankara says is the main perpetrator of the 2016 coup.

Alan Madison, a spokesman for Borusan Mannesmann's USA subsidiary, said the company and its Turkish parent were still studying Trump's new proposal and declined to comment further.

Foreign Ministry Spokesperson Hami Aksoy also said in a statement that Turkey wanted issues to be solved through diplomacy, dialogue, good intentions and bilateral understanding.

"Turkey expects other member countries to abide by worldwide rules", the ministry said in a statement, adding that it would support steel and aluminum exporters in all global platforms.

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"If you have dollars, euros or gold under your pillow, go to banks to exchange them for the Turkish lira".

The collapsing Turkish lira, which has lost about 70% of its value Vs USD this year largely over worries about Erdogan's wider control of the economy has marked an time lows YTD. High level meetings in Washington between US and Turkish officials ended this week without an apparent resolution.

In a bid to ease investor concerns about Turkey's economic policy, the country's finance minister says the government will safeguard the independence of the central bank. "This is a national, domestic battle", he told a crowd in the northeastern city of Bayburt.

He appeared to blame foreigners for trying to hurt Turkey, saying: "This will be my people's response against those waging an economic war against us".

Presenting the government's new economic model, he said the next steps of rebalancing would entail lowering the current account deficit and improving trust. Hard currency debt issued by Turkish banks suffered similar falls. "Don't forget, if they have their dollars, we have our people, our God".

Officials from Erdogan's office said the two on Friday "expressed pleasure" that economic and financial ties between their countries were progressing "positively" and of the continued cooperation in the defense industry and energy.

The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten at its last meeting.

Considerable weakness was also visible among steel stocks, as reflected by the 2.5 percent drop by the NYSE Arca Steel Index.

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