Donald Trump Authorizes More Steel and Aluminum Tariffs on Turkey

Donald Trump Authorizes More Steel and Aluminum Tariffs on Turkey

"The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis", said Andrew Kenningham, chief global economist at Capital Economics.

President Tayyip Erdogan told Turks on Friday to exchange their gold and dollars into lira, with the currency in free fall as President Donald Trump escalated a feud with Ankara by doubling tariffs on metals imports. To do that, they have to sell lira - worsening the rout.

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. 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. Rate increases are the central bank's main tool to support the currency and fight inflation.

"Don't forget", he said, "if they have their dollars, we have our people, our God". That drained investor confidence in the central bank, leading to a further sell-off of the currency.

A diplomatic source, however, familiar with talks of Turkish deputy foreign minister Sedat Onal in Washington this week, told The National that exchanging Mr Brunson for Mr Atilla is not on the table from the U.S. side.

Analysts have warned that rising U.S.

Image: Donald Trump claimed 'relations with Turkey are not good at this time!' "Repeated efforts to communicate to the U.S. administration that none of the stated criteria driving America's tariffs are applicable to Turkey have thus far proven fruitless", he said.

The lira briefly fell as much as 14.6 percent - its biggest one-day drop since early 2001 - before paring losses.

State Department Spokesperson Heather Nauert told reporters on August 9 that the United States would define progress in relations with Turkey with Brunson's return to the United States.

The lira stumbled even more as Erdogan delivered a wild speech to supporters about the plunging currency, encouraging Turks to buy it up.

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Shares in France's BNP Paribas, Italy's UniCredit and Spain's BBVA, the banks seen as most exposed to Turkey, fell as much as 4 percent.

A stronger dollar has also put more pressure on the currency. So the sudden fall raises the possibility of corporate bankruptcies or bank failures that could hurt the economy.

The White House also cited currency movements in China last week when Trump called for a possible increase in tariff rates on Chinese imports. Prices are already up 16 percent since a year ago and this week's drop will make that worse.

Turkey's currency hit a record low against the U.S. dollar and euro early on Friday as it fell seven percent against the dollar, after initially losing 12 percent. "You will not make money at the expense of Turkish people".

After he spoke, Mr Trump tweeted that aluminium tariffs "with respect to Turkey" would be raised to 20% and steel to 50%.

Q: What is Erdogan proposing to do?

Ankara blames for an attempted coup in 2016.

'This is a national, domestic battle.

McHugh reported from Frankfurt, Germany.

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