Home Technology News Trump’s new tariffs send Turkey’s currency crashing, as Erdogan tells people to...

Trump’s new tariffs send Turkey’s currency crashing, as Erdogan tells people to ‘trust in God’

13
0
SHARE


Donald Trump unexpectedly doubled metal tariffs against Turkey on Friday, inflaming tensions with a Nato ally and sending the country’s currency spiraling downwards. 

The US president announced in a tweet that tariffs on steel imports from Turkey would rise to 50 per cent and on aluminum imports to 20 per cent. 

The action was taken after talks broke down over the release of US pastor Andrew Brunson, who is in Turkey facing trial for espionage and terror-related charges.

After the announcement the embattled Turkish lira tumbled more than 16 percent to new record lows against the dollar on Friday. It is down more than 40 per cent this year

Mr Trump referenced the fact the lira had been sliding “rapidly downward” against the dollar in his tweet announcing the news, adding: “Our relations with Turkey are not good at this time!”

But Recep Tayyip Erdogan, the Turkish president, was defiant, urging citizens to cash in their foreign currency for lira and pledging to win the trade war that had broken out. 

“If you have dollars, euros or gold under your pillow, go to banks to exchange them for Turkish lira. It is a national fight,” Mr Erdogan said.

“This will be the response to those who have declared an economic war,” he added, blaming Turkey’s woes on an “interest rate lobby” seeking to push the country to higher rates.

Mr Erdogan had raised eyebrows on Thursday when he appeared to invoke divine intervention, saying: “If they have dollars, we have our people, we have our right and we have Allah!”

Turkey’s trade ministry also claimed that the steel and aluminium tariffs were against the rules of the World Trade Organisation (WTO).

Donald Trump, the US president, is currently spending time away from the White House at one of his golf resorts Credit: AP Photo/Carolyn Kaster

Tensions between America and Turkey have been ratcheting up in recent months, despite the latter being a critical ally for the US’s military engagement in the Middle East. 

Mr Trump is demanding the return of Mr Brunson, who is accused of being involved in the failed coup to overthrow the Turkish government in 2016.

The US government has dismissed the claims against the evangelical Presbyterian pastor as baseless and without evidence.

Mr Erdogan is in turn demanding the extradition of Fethullah Gulen, an exiled cleric living in Pennsylvania whom the Turkish government accuses of being behind the coup attempt. America has refused. 

Talks involving Mike Pence, the vice president, and Mike Pompeo, the secretary of state, to secure Mr Brunson’s release have reportedly being going on being the scenes in recent weeks. 

However they appear to have stalled. Sanctions on Turkey were announced earlier this month over Mr Brunson’s case before being increased by Mr Trump on Friday. 

Mr Trump’s recent frustration towards the Turkish leader is in marked contrast to their personal relations earlier in his presidency. 

The US president has previously called Mr Erdogan a “friend of mine” and even once reportedly fist-bumped him during a meeting. 

But the rhetoric between both men has escalated markedly in the last fortnight, with little sign of tensions easing any time soon. 

Mr Erdogan talked to Vladimir Putin, the Russian president whose country has also been hit by new sanctions this week, on the phone on Friday. 

Donald Trump, left, shakes hands with Recep Tayyip Erdogan Credit: Presidency Press Service via AP, Pool

The pair discussed economic and trade issues as well as the Syria crisis, the Turkish presidency said – fueling suggestions that both countries could strike up a closer partnership. 

The White House sought to clarify Mr Trump’s tweet on Friday, saying he had “authorised the preparation of documents” – suggesting the tariffs could yet be avoided. 

Can Selcuki, an analyst with Istanbul Economics Research and former economist with the World Bank, said Mr. Erdogan’s defiant words were simply political rhetoric.  

“He’s clearly aware of what the stakes are but he’s in the middle of a very fierce bargain with the US and he wants to appear strong and uncompromising of his position,” Mr Selcuki stated.

In a more market-friendly speech, the Turkish Treasury and Finance Minister BeratAlbayrak, Erdogan’s son-in-law, insisted the central bank was independent, a key concern which contributed to the currency’s plunge.

The bank eventually increased interest rates in May but analysts say more is needed to cool off an overheated economy with a large amount of foreign debt. 





Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here