Turkey Counterpunches By Raising Tariffs On U.S. Goods

Marco Green
August 16, 2018

Tariffs were also increased on other U.S. goods, including cosmetics, rice and coal.

A calculation by Bloomberg shows the items listed in the decree accounted for $1 billion of imports a year ago, similar to the amount of Turkish steel and aluminum exports that were subjected to higher tariffs by President Donald Trump last week.

Turkey announced earlier to slap tariffs on American goods. "This is regrettable and a step in the wrong direction".

Tensions between the two North Atlantic Treaty Organisation allies have been strained amid Turkey's detention of an American pastor and other diplomatic actions.

The crisis has sent the Turkish currency into free fall since Friday.

The lira has lost almost 40 percent against the dollar this year, driven by worries over President Tayyip Erdogan's growing control over the economy and his repeated calls for lower interest rates despite high inflation.

The Qatari money will be channelled into banks and financial markets, a Turkish government source told Reuters. The currency picked up 6 percent and strengthened briefly at just under 6 to the dollar.

Explaining the new tariffs, Turkish Vice-President Fuat Oktay said the rises were ordered "within the framework of reciprocity in retaliation for the conscious attacks on our economy by the U.S. administration". Turkey has urged the U.S.to halt its support for Kurdish YPG fighters or risk confronting Turkish forces on the ground in Syria.

The Turkish lira has plummeted to record lows in recent weeks and has dropped 42 percent so far this year, a reaction to Turkey's strained relations with the United States and Erdogan's economic policies and debt accumulation. Turkey's exports to the United States past year amounted to $8.7 billion, making it Turkey's fifth-largest export market.

She urged Ankara to release the detained American pastor Andrew Brunson, three locally employed staff of the USA embassy, and a NASA scientist.

The White House said on Wednesday that the United States will not lift sanctions on Turkish steel and aluminum products even if detained American pastor Andrew Brunson is released. "These are appeals that require fast decision making because they are related to an individual's freedoms", Brunson's attorney Ismail Cem Halavurt told Reuters.

White House press secretary Sarah Sanders said the USA had seen "no evidence that Pastor Brunson has done anything wrong".

Last week Trump said he was doubling tariffs on metal imports.

On Tuesday, Erdogan called for a boycott of US electronics products, and his spokesperson described American policy as goading Turkey into an "economic war".

On Tuesday, Mr Erdogan said Turkey would boycott USA electronic goods such as Apple's iPhone, even though he had been photographed repeatedly using one.

U.S. State Department spokesperson Heather Nauert addresses a press briefing in Washington D.C., the United States, Aug. 15, 2018.

Measures to restrict the amount of currency that can be exchanged with foreign banks were also said to be boosting the currency.

But many analysts say the only way for the authorities to show they are really serious about tackling Turkey's economic problems - which include inflation approaching some 16 percent - would be a sharp interest rate hike.

The lira was trading on Wednesday at 6.0 to the dollar, a gain in value on the day of 5.2 percent.

Other reports by Click Lancashire

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