Turkey slaps more tariffs on United States goods, escalating trade tensions

Marco Green
Августа 16, 2018

There is an increasing risk of lower-level Turkish officials, acting on their own initiative, taking measures against USA individuals and companies, including arbitrary regulatory inspections, scrutiny over existing state contracts, as well as deliberate difficulties for U.S. citizens in customs.

The war of words between Turkey and the United States has escalated significantly in the past week as the USA calls for the release of an American evangelical pastor.

Turkey doubled tariffs on some US imports including cars, alcohol and tobacco on Wednesday in retaliation for USA moves, but the lira rallied a further six per cent after a fresh move by banking authorities to underpin the currency.

The Turkish government doubled its tariffs on imports of American cars and alcoholic beverages to 120 and 140 percent, respectively, CNN reported.

Tariffs on cosmetics, rice and coal were also increased.

Turkey's Vice President Fuat Oktay reportedly said on Twitter Wednesday that the government increased the tariffs in retaliation for the "deliberate economic attacks by the United States".

It recovered a bit, by four per cent to around 6.12 lira per USA dollar Wednesday, after the government took steps to shore up the currency by reducing the daily limit in bank foreign currency swap transactions.

It was supported by news of a planned conference call on Thursday in which the finance minister will seek to reassure investors concerned by Erdogan's influence over the economy and his resistance to interest rate hikes to tackle double-digit inflation.

Turkey's lira has plummeted almost 40 percent this year due to concerns over Erdogan's growing influence on the economy.

While the lira climbed 5.3 per cent to 6.0294 per dollar by 7:06 p.m.in Istanbul, it's still down 18 per cent this month.

Turkish President Tayyip Erdogan has said in recent public speeches that Turkey and its economic allies do not need to use the dollar to conduct bilateral trade.

Turkey slaps more tariffs on United States goods, escalating trade tensions
Turkey slaps more tariffs on United States goods, escalating trade tensions

Speaking of Brunson's case, Sanders said, "We feel that Turkey and specifically President Erdogan have treated Pastor Brunson. very unfairly, very badly".

"Pastor Andrew Brunson is an innocent man held in Turkey & justice demands that he be released".

A White House official said the United States was warning more economic pressures may be in store for Turkey if it refuses to release Brunson.

White House spokeswoman Sarah Huckabee Sanders said "the tariffs from Turkey are certainly regrettable and a step in the wrong direction".

According to Bloomberg calculations, Turkey's new tariffs affect goods that accounted for US$1 billion of imports past year, similar to the value of the metals subjected to higher USA taxes.

President Donald Trump personally took part in negotiations aimed at reaching a deal to release Brunson. Brunson was moved to house arrest in July 2018.

The Kremlin said the same day that Russian Federation favored bilateral trade with all countries in their national currencies, rather than the dollar, but that the idea needed detailed work before being implemented.

Pastor Andrew Brunson's lawyer renewed an appeal on Tuesday for Brunson's release from house arrest and for his travel ban to be lifted.

President Erdogan said earlier this week that Turkey should not "give in to the enemy" by investing in foreign currencies.

The 2nd Penal Court in Izmir rejected his appeal and sent the pastor's petition to an upper court, Hurriyet Daily News reported.

While Erdogan can buy time, it's not clear how the standoff with the US can be resolved so long as Turkey continues to detain the pastor.

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