Trump doubles tariffs on Turkey, stoking jitters

Euro vs US Dollar Chart- 5min

Trump vows to double steel and aluminum tariffs on Turkey

Mr Erdogan has spoken out after US President Trump doubled punishing tariffs on the nation adding that those responsible "think they can destroy Turkey".

Trump's tweet caused a further drop in the Turkish currency, which is now down 13 percent on the day. Aluminum will now be 20% and Steel 50%.

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.

The latest tariffs stem from the trade fight Trump launched earlier this year with several countries, including Turkey, according to the Washington Post.

Erdogan noted that Ankara has no intention of tolerating the situation when an economic war had been declared against the whole world, with pressure exerted on some countries, which are threatened with sanctions.

"I have just authorized a doubling of tariffs on steel and aluminum with respect to Turkey as their currency slides rapidly downward against our very strong dollar", The US president said on Twitter.

Turkish lira fell to an all-time low against the dollar yesterday, making it worth about 16 cents. The weakened currency's value has helped increase inflation and anxious worldwide investors.

President Trump's discarding of the Iran nuclear deal is a point of contention, as well, as almost half of Turkey's oil imports come from Iran, meaning new sanctions against Iran come back and hurt the Turkish economy as well.

Turkey's President Recep Tayyip Erdogan addresses his supporters in Bayburt, Turkey, Friday, Aug. 10, 2018. But some investors fear the Turkish economy is growing too quickly and could face problems.

Waves from the crisis spread overseas, with investors selling off shares in European banks with large exposure to the Turkish economy.

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Independent analysts argue the central bank should instead raise rates to tame inflation and support the currency.

"If they have their dollar, we have the people, we have Allah", he said, as the lira continued to fall.

"If you have dollars, euros or gold under your pillow, go to banks to exchange them for Turkish lira", he said on national television.

Erdogan on Thursday portrayed the currency drop as a "campaign" to harm Turkey and called on the people not to worry.

Erdogan added that Turkey was not afraid of "threats" and said it had many alternative sources of economic cooperation "from Iran, to Russian Federation, to China, and some European countries".

One of the hard issues affecting U.S.

The new tariffs announced on Friday come as the United States increases pressure for the release of American pastor Andrew Brunson, who has been in Turkish custody since 2016 on charges of espionage.

According to figures from the Turkish Government, for the period of 2002 to October 2017, Turkish direct investments in the United States reached $3.7 billion while USA investments in Turkey amounted to $11.1 billion, second only to the Netherlands' 21.6 billion. He wrote and Washington's unilateral actions against Turkey undermine American interests and force Ankara to search for new allies.

In a separate opinion piece in the pro-government newspaper Daily Sabah, Erdogan's spokesman Ibrahim Kalin said Turkey's efforts to solve the crisis with diplomatic methods have been dismissed by the Trump administration, warning that Washington might completely lose Ankara as an ally. He claims higher rates lead to higher inflation - the opposite of what standard economic theory says.

This story is based in part on wire service reports.

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