Higher US tariffs increase pressure on Turkish economy

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President Donald Trump announced Friday that he plans to double steel and aluminum tariffs on Turkey - prompting the lira to plunge 20 percent - amid heightened tensions between the two North Atlantic Treaty Organisation allies.

He also said it was wrong of the United States to try to bring Turkey into line with threats, a day after Trump doubled tariffs on steel and aluminium imports from Turkey.

"As he stated, the President has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey".

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, worldwide concern over President Recep Tayyip Erdogan's push to amass power, and a souring in relations with allies like the US.

Among the issues, Turkey has arrested an American pastor and put him on trial for espionage and terror-related charges linked to a failed coup attempt in the country two years ago.

"Unfortunately, this still isn't a good reason for Trump's latest trade action - because it is an illegal one", Levitz said.

Washington "must give up the misguided notion that our relationship can be asymmetrical", he said in the opinion piece.

He also advised them to show solidarity by converting any stashed-away gold or foreign currency to Turkish lira in a bid to wage a "war of independence" against America.

President Trump's sanctions saw the Turkish lira plummet to a risky low, causing a financial crisis that has also threatened to destroy Europe after it triggered concerns with banks in Spain, Italy and France.

Erdogan also warned that Ankara could start looking for "new friends and allies".

"We will not lose the economic war", state-run TRT Haber television quoted Erdogan as saying.

That turned into a rout on Friday, with the currency diving as much as 18 per cent at one point, the biggest one-day drop since a 2001 financial crisis in Turkey.

His comments on interest rates - and his recent appointment of his son-in-law as finance minister - have heightened perceptions that the central bank is not independent.

Andrew Craig Brunson, an evangelical pastor from Black Mountain, North Carolina, arrives at his house in Izmir, Turkey, Wednesday, July 25, 2018.

In what appears to be a diplomatic riposte, Turkey later said Mr Erdogan had held a phone call with Russian President Vladimir Putin to discuss economic ties. "Because this is the language they understand", he said.

The Turkish lira TRYTOM=D3 has always been falling on worries about Erdogan's influence over monetary policy and worsening relations with the United States.

But Turkey's trade ministry said the tariffs were against World Trade Organisation rules.

"If they have the dollar, we have Allah", he said.

"The US and Turkey are breaking up". It is host to a critical part of the Western alliance's missile defense system again Iran.

"The dollar also has an edge on the euro amid continuing repatriation of funds to the United States, and the pound looks to keep retreating indefinitely with "no-deal Brexit" the main driver", said Mitsuo Imaizumi, chief FX strategist at Daiwa Securities.

Trump pointed out on Twitter that the lira was not doing well, but one of Erdogan's economic advisers, Yigit Bulut, responded that the sell-off in the lira had caused $300 billion in losses in the USA stock market.

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