Turkey hits back at USA with tariff hikes on key products
- Author: Eleanor Harrison Aug 16, 2018,
Aug 16, 2018, 2:02
The Turkish lira has dropped to record lows in recent weeks, having fallen some 42 percent so far in 2017.
Presidential spokesman Ibrahim Kalin claimed Wednesday that a series of measures aimed at shoring up the Turkish currency were taking effect and that he expected the lira to strengthen further.
Russia backs using national currencies, not the United States dollar, in its trade with Turkey, Russian Foreign Minister Sergei Lavrov said on Tuesday, but he made no firm commitments that would immediately help Ankara to weather its currency crisis.
"Turkey would do well not to test @POTUS Trump's resolve to see Americans who are wrongfully imprisoned in foreign lands returned home to the United States", Vice President Mike Pence said in a tweet.
The Trump administration imposed its own financial sanctions on two Turkish ministers and doubled steel and aluminum tariffs on the country earlier this month as President Donald Trump tries to secure the Brunson's release.
On Tuesday, Turkish President Recep Tayyip Erdogan called on Turks to "boycott" USA electronic goods, but United States officials seemed unconcerned.
Sonar Cagaptay, director of the Turkish program at the Washington Institute, described the Qatari investment as a "big deal that could build investor confidence in Turkey, staving off potential economic collapse".
State media in Doha said Sheikh Tamim bin Hamad Al-Thani was travelling to Turkey for a "working visit".
The dispute between the North Atlantic Treaty Organisation allies - brought to a new intensity by Turkey's holding of an American pastor for two years - has raised questions over the future of their partnership and fanned fears of a looming economic crisis in Turkey.
The United States on Wednesday ruled out removing steel tariffs that have contributed to a currency crisis in Turkey even if Ankara frees a USA pastor, as Qatar pledged $15 billion in investment to Turkey, supporting a rise in the Turkish lira.
The lira´s fall had raised fears Turkey was on the verge of a fully-fledged economic crisis, especially in its banking system, that could spill over into Europe and other markets.
Qatar's banking sector has considerable exposure to Turkey, whose currency has lost almost 40 percent this year.
Another potential flash point this week will be an appeals court decision on the fate of Andrew Brunson, the evangelical pastor Erdogan accuses of aiding a coup attempt against him two years ago. Erdogan spoke with German Chancellor Angela Merkel on Wednesday and will speak to French President Emmanuel Macron on Thursday. An upper court had yet to rule on the appeal, his lawyer told Reuters.
The Kremlin said the same day that Russian Federation favored bilateral trade with all countries in their national currencies, rather than the dollar, but that the idea needed detailed work before being implemented.
Brunson works as a pastor at the small Izmir Resurrection Church and leads a congregation of around two dozen.
"The US is our major trade partner but it's not the only one", Pekcan, the trade minister, was quoted as saying by the official Anadolu news agency. Brunson, who faces up to 35 years in jail if found guilty, has denied the charges which Washington believes are politically motivated. "After the spike of the us dollar, prices of foreign products have increased dramatically and the consumer has no purchasing power".