Turkey hikes tariffs on United States products amid escalating tensions

Marco Green
August 17, 2018

Those consequences are USA sanctions and a doubling of tariffs on Turkish steel and aluminum, announced by President Trump on Friday.

US President Donald Trump widened the diplomatic rift with a tweet that announced an increase of tariffs on steel and aluminium and that said "our relations with Turkey are not good at this time". Turkey's exports to the United States past year amounted to $8.7-billion, making it Turkey's fifth-largest export market.

"For months, the U.S. Chamber has warned that alienating our allies in a tit-for-tat trade war would harm the U.S. economy and undermine American global leadership, and evidence of that harm to U.S. workers, farmers, and businesses is mounting".

It comes after Washington imposed punitive sanctions on Ankara.

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

The move sent the Turkish lira to a record low against the dollar and spurred declines in other emerging market currencies. The currency picked up 6 percent and strengthened briefly at just under 6 to the dollar.

The Trump administration said Wednesday that Erdogan's imposition of retaliatory tariffs against the USA were "a step in the wrong direction".

The US doubled tariffs last week over Turkey's refusal to free a US pastor who is imprisoned there. Turkey's exports to the United States past year amounted to $8.7 billion, making it Turkey's fifth-largest export market.

The two countries also remain at odds over an American pastor who is now under house arrest in Turkey facing terrorism charges. An upper court had yet to rule on the appeal, his lawyer told Reuters.

Turkey said it would not be strong-armed into releasing Brunson, whose second appeal for release was rejected on Wednesday.

The White House defended a slew of tariffs and sanctions that have substantially weakened Turkey's currency and forced regulators to take steps to curb financial flows out of the country.

Trade Minister Ruhsar Pekcan said the tariffs would amount to $533m.

The lira went into a tailspin after a diplomatic spat with the USA over a detained pastor in Turkey.

Optimism about better relations with the European Union after a Turkish court released two Greek soldiers pending trial and a banking watchdog's step to limit foreign exchange swap transactions have also helped the lira.

But analysts say such measures are artificial stop-gaps and do not deal with the core issues hurting Turkey's economy - especially inflation approaching some 16 percent - which are crying out for a sharp interest rate hike.

"Rates have gone up by 10 percent".

Other reports by Click Lancashire

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