Turkish Currency Collapses After Trump Doubles Metals Tariffs

Andrew Brunson an American pastor is released to home detention last month in Izmir Turkey

Turkish President Tayyip Erdogan on Saturday said it was wrong of the United States to try to bring Turkey into line with threats, a day after President Donald Trump doubled tariffs on Turkish metal imports as the row between the two North Atlantic Treaty Organisation allies deepened.

Earlier on Friday, Trump ramped up his attack on Turkey by doubling U.S. tariffs on Turkish aluminium and steel imports to 20 percent and 50 percent, respectively.

The currency's drop - 40% so far this year - has become a gauge of fear over a country facing the fallout of years of debt-fuelled growth, global concern over President Recep Tayyip Erdogan's push to amass power, and a souring in relations with allies like the US.

In response, President Trump tweeted in July, "The United States will impose large sanctions on Turkey for their longtime detainment of Pastor Andrew Brunson, a great Christian, family man and wonderful human being". He wrote and Washington's unilateral actions against Turkey undermine American interests and force Ankara to search for new allies. Trump tweeted Friday morning.

Erdogan also yesterday held telephone talks with Russian President Vladimir Putin, discussing economic and trade issues as well as the Syria crisis, the Turkish presidency said.

Turkey's currency has nosedived amid concerns about the country's economic policies and its dispute with the US. "If there are euros, take these out ... immediately give these to the banks and convert to Turkish lira and by doing this, we fight this war of independence and the future".

Erdogan has further attempted to bolster the nation against this "economic war", calling for citizens to exchange foreign currency and gold for lira as part of the "domestic and national struggle".

Whether or not further declines in the Rand occur now depend largely on the fate of the Lira.

In his speech in the northeastern city of Bayburt, Erdogan added that he would decisively defend the country against economic attacks.

"Their currency, the Turkish lira, slides rapidly downward against our very strong dollar!"




One dollar bought as much as 6.43 lira today, after slipping about 40 percent this year.

After winning a June election with revamped powers, Erdogan tightened his control over the central bank and appointed his son-in-law Berat Albayrak to head a newly-empowered finance ministry. "If they have their dollar, we have the people, we have Allah".

Q: Why is Turkey's currency so weak?

Without naming countries, Erdogan said supporters of a failed military coup two years ago, which Ankara says was organised by a US -based Muslim cleric, were attacking Turkey in new ways since his re-election two months ago.

Turkey was facing artificial financial volatility, Erdogan said, and people should not pay close attention to foreign exchange prices, and should instead focus on the "big picture".

Some 4 million displaced people, most them from Syria, are now living in Turkey.

Relations between the United States and Turkey have not been helped by Turkey jailing an American citizen for an alleged attempted coup in 2016.

Brunson's charges include spying for the PKK - listed as a terrorist group by both the USA and Turkey - and Fetullah Terrorist Organization (FETO). It is obvious how it will be done: "since the final decision-maker of all policies in the new regime is the president, the responsibility of regaining confidence is on his shoulders", said Seyfettin Gursel, a professor at Turkey's Bahcesehir University.

"Aluminum will now be 20% and Steel 50%", President Trump wrote. As the currency drops, Turkish companies and households with debt in foreign currencies see their debts expand.

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