Trump Doubles Tariffs On Steel, Aluminum From Turkey

Howard TerryAug 11, 2018

Lindsay Graham of SC, said Trump's decision was retaliation against Turkey for not releasing Brunson.

Turkey is a major emerging market economy with $466 billion in foreign debt (about 78 percent in USA dollars and about 18 percent in euros), or 52.9 percent of gross domestic product. The central bank noted that Spain's BBVA, Italy's UniCredit and France's BNP Paribas all have significant exposure to Turkish debt and that a crashing lira could affect repayment of foreign currency loans.

"I have just authorized a doubling of tariffs on steel and aluminum with respect to Turkey as their currency slides rapidly downward against our very strong dollar", The US president said on Twitter.

Economist Chad Bown, who specialises in trade issues, said Turkey accounted for just over four percent of United States steel imports in 2017, but a very small fraction of the aluminum brought into the country.

The Lira has lost almost a third of its value this year, as relations with the United States have become increasingly strained.

A Turkish man waits to change his USA dollars with Turkish liras inside a currency exchange shop in Ankara, Aug. 10, 2018.

The penalties also bar any USA transactions with the two men.

Turkey also wants the United States to extradite Fethullah Gulen, a Pennsylvania-based Muslim cleric who Turkish authorities say masterminded the coup attempt against Erdogan in which 250 people were killed.

The lira's fall has been made worse by President Recep Tayyip Erdogan's statements on economic policy.

The lira tumbled 13% in one day, to 6.51 per United States dollar, a massive move for a currency that will make the Turkish poorer and further shake worldwide investors' confidence in the country.

He also urged Trump to recognize the 1915 Turkish slaughter and exile of 1.5 million Armenians as a genocide, which US presidents have declined to do for decades. That drained investor confidence in the central bank, leading to a further sell-off of the currency.

Trump's action on Friday indicates he is willing to use his presidential powers as an economic and diplomatic weapon, even against allies, the Wall Street Journal reported. A delegation of Turkish officials held talks with their counterparts in Washington this week but there was no sign of a breakthrough.

President Donald Trump said in a tweet Friday that he would hit Turkey with additional tariffs, as their national currency continues to drop.

In a tweet on Friday, Foreign Ministry Spokesman Hami Aksoy said President Donald Trump's decision, which also violates the rules of World Trade Organization, "cannot be associated with seriousness expected from a state".

Turkey accounted for 373 million euros of BBVA's its first half net attributable profit, 14 percent of the group total, suggesting that it may be the most vulnerable to the country's market turmoil. There wasn't much Eurozone data released over the past week but the few reports we had were far from impressive as factory orders and industrial production in Germany tumbled.

"If there are dollars under your pillow, take these out", he told supporters in the north-eastern Turkish town of Ünye.

'This is a national, domestic battle.

Treasury and Finance Minister Berat Albayrak - who is Erdogan's son-in-law - was scheduled later on Friday to outline a "new economic model".

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