Why Trump's Turkey Tariffs Are Worrying Investors

Why Trump's Turkey Tariffs Are Worrying Investors

President Recep Tayyip Erdogan hit back Saturday at U.S. "threats" over a detained American pastor which has escalated tensions between the two North Atlantic Treaty Organisation allies and piled pressure on the Turkish currency.

"The markets have lost confidence in the triumvirate of President Erdogan, his son-in-law as finance minister and the Turkish Central Bank's ability to act as it needs to", said Charles Robertson, global chief economist at Renaissance Capital.

"If the U.S.is turning its back on us.choosing a pastor instead, sorry.we continue our path with decisive steps", Erdogan told a crowd of supporters in Black Sea coastal city of Rize.

American evangelicals have pressed Mr Trump for action on Pastor Brunson, who was held in prison for nearly two years but was recently moved to house arrest. "Relations with countries who behave like this have reached a point beyond salvaging", said Erdogan, who warned of "economic war".

The new duties on Turkey are double the level that Trump imposed in March on steel and aluminium imports from a range of countries. The U.S. recently hit two high-ranking Turkish officials with sanctions after the Turkish government refused to release imprisoned Christian pastor Andrew Brunson.

Mr Erdogan said although the nations had been allies for decades, Turkey "now has alternatives". "Because this is the language they understand", he said. But given that Turkey is in the midst of an economic crisis, it might prove an effective one. Operations in emerging markets can lose significant value as the USA dollar strengthens, as it did Friday.

President Trump's announcement Friday morning that he has authorized the doubling of tariffs on steel and aluminum imports coming from Turkey came in a tweet that noted, "Our relations with Turkey are not good at this time!".

The latest escalation between Ankara and Washington was denounced by the Turkish press, with pro-government daily Sabah saying "the currency attack" was no different from the attempted coup of July 2016.

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"We are aware that the issue is not the dollar, euro, gold. these are the bullets, cannon balls, missiles of the war started against us", said Erdogan. "Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies", Erdogan said.

Unilateral steps taken by the United States only harm its interests and security, Turkish President Recep Tayyip Erdogan said Friday in an article he wrote for The New York Times, as reported on Anadolu Agency.

He reiterated his call on citizens to change US Dollars and Euros for the Turkish Lira in the face of a sharp plunge his country's currency witnessed in financial markets this week. The currency is down about 40 percent so far this year.

"The US runs the risk of losing Turkey as a whole", he wrote.

The New York Times suggested that Trump could also be trying to offset the effects of Turkey's weakened currency on the existing tariffs.

On Friday Turkey made it clear Erdogan had spoken on the phone with Russian President Vladimir Putin after the latest U.S. tariffs, with the two men "expressing pleasure" that relations were progressing "positively".

Turkey and the USA are now experiencing rocky relations following Washington's imposition of sanctions on Interior Minister Suleyman Soylu and Justice Minister Abdulhamit Gul for not releasing American Pastor Andrew Brunson, who faces terrorism charges in Turkey.

"The US and Turkey are breaking up".

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