Trump doubles steel & aluminum tariffs on Turkey

Turkish delegation returns home after meeting in US

Turkish delegation returns home after meeting in US

Reverberations spread through global markets on Friday after U.S. President Donald Trump imposed higher tariffs on metal imports from Turkey, sending the country's lira currency TRYTOM=D3 deeper into a tailspin.

The Turkish lira plunged on Friday, raising questions about the country's financial stability, as investors anxious about the president's unorthodox economic policies and a dispute with the United States that has led to sanctions.

The lira's plunge is one of the most serious economic crises that Erdogan has faced since coming to power in 2003 in the wake of a financial crisis in 2001 that brought the economy to near meltdown.

European and American bank stocks declined on concerns about their exposure to Turkey. Today, however, this does not appear to be on the cards, amid growing divisions between Turkey and the US.

The lira hit a record low of 6.24 per dollar on Friday, before recovering to 5.96, down more than 7 per cent on the day.

The United States, the world's biggest steel importer, imposed tariffs of 25 percent on steel and 10 percent on aluminum in March for imports from a variety of countries.

The numbers have been sliding ever since President Erdogan's election victory in June, with concerns among foreign investors about his control of monetary policy as well as the birth of Turkey's new presidential republic. -Turkish relationship, a deterioration made worse by Turkey's worsening human rights record and increased cooperation with Russian Federation and Iran in Syria. Financial upheaval there risks further destabilizing an already volatile region.

Brunson is now on trial in Turkey for espionage and terror-related charges linked to a failed coup attempt in the country two years ago.

Turkey imposed $266.5 million in tariffs against the USA in June, targeting American imports of coal, paper, walnuts, almonds, tobacco, whiskey and machinery, amongst other items.

The White House said Trump would use a section of US law that allows for tariffs on national security grounds to impose the increased duties.

Analysts suggest Erdogan could have Washington in mind, given Ankara is demanding the extradition of US -based Turkish cleric Fethullah Gulen, who is blamed for masterminding the botched 2016 military takeover.

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Has the moment finally arrived when political and economic ties between Turkey and the USA snap, ending what was a very close partnership dating back to the late 1940s?

Even before Trump's announcement, President Tayyip Erdogan told Turks to exchange gold and dollars for lira in order to fight "an economic war".

Last week, the United States imposed sanctions on Turkey's justice minister and interior minister for not releasing US pastor Andrew Brunson.

Trump made his unexpected announcement on Twitter from his golf club in Bedminster, New Jersey, as the Turkish currency, the lira, fell to all-time lows against the USA dollar.

He does have an understandable reason: Turkey has been holding an American pastor captive for 21 months, on grounds that the preacher was involved in the failed coup attempt against Turkish president Recep Tayyip Erdogan in 2016.

That indicates that people are buying dollars and euros, not selling them off - and that they're not finding buyers in lira, anyway. This is a national struggle. "This will be the response to those who have declared an economic war".

USA officials have said the courts would require sufficient evidence to extradite the elderly Gulen, who has denied any involvement in the coup.

"Confidence needs to be regained".

Presenting the government's new economic model, he said the next steps of rebalancing would entail lowering the current account deficit and improving trust. That makes a loan in dollars that much more expensive to repay.

"I don't think foreign banks will be willing to lend to Turkish banks".

The latest escalation came as Turkey's Economy Minister Berat Albayrak, who is Erdogan's son-in-law and a trusted lieutenant, unveiled what was touted as a new economic plan, pledging Central Bank independence, tighter budget discipline and sustainable and healthy growth.

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