Published: Thu, August 16, 2018
Markets | By Jeffery Armstrong

Turkey doubles tariffs on some USA imports; Turkish lira rallies

Turkey doubles tariffs on some USA imports; Turkish lira rallies

Ankara also announced new tariffs on U.S. imports, adding duties of 50% to 140% on alcohol, cars and rice.

The lira - which lost just under a quarter of its value on Friday and Monday - however continued to claw back some ground on financial markets, rallying around five percent against the dollar.

The government announced the tariffs "under the principle of reciprocity", following sanctions imposed by Washington over the detention of an American pastor, which sent the lira tumbling to record lows against the dollar.

Investors are looking for substantive economic policy changes by Erdogan - namely the acceptance of higher interest rates - whereas the president has so far reacted mainly by blaming foreign powers, particularly the United States, which he says is waging an "economic war".

The United States on Wednesday ruled out removing steel tariffs that have contributed to a currency crisis in Turkey even if Ankara frees a US pastor, as Qatar pledged $15 billion in investment to Turkey, supporting a rise in the Turkish lira.

Turkey has retaliated by announcing Wednesday that it will increase tariffs on certain USA products, including on cars, rice, alcohol, coal and cosmetics. But she added that Turkey's economic problems "are a part of a long-term trend, something of its own making and not the result of any actions the United States has taken".

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Earlier in the week, President Recep Tayyip Erdogan asked Turkish citizens to boycott the use of American technology like iPhones, in response to U.S. tariffs levied late last week.

Some 3,000 investors registered to join Albayrak's planned tele-conference, the private NTV broadcaster reported.

With the dispute between the USA and Turkey seeming to escalate by the day, the value of Turkey's lira currency against the dollar has plummeted, but Sanders rejected any blame on the U.S.'s part.

Brunson is at the center of a diplomatic spat between North Atlantic Treaty Organisation allies Turkey and the United States, which has helped trigger a Turkish currency crisis.

Another tweet user named Melike wrote: "Buy Turkish lira instead of the dollar and drink Turkish coffee instead of American Starbucks coffee".

Erdoğan and Trump are locked in a dispute about the United States pastor Andrew Brunson, who was arrested nearly two years ago and accused of plotting against the Turkish government.

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A presidential source also confirmed Doha's pledge to "rapidly implement the $15 billion investment package".

In another episode of diplomatic activity, Erdoğan also met the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani, who was on a "working visit" to meet the Turkish president.

In an effort to defend the lira, Turkey's central bank tightened its rules on currency swaps and other foreign exchange transactions, limiting banks' ability to supply lira to foreign financial companies.

That hasn't prevented Turkish officials from continuing to press their perceived leverage in Brunson.

Erdogan spoke on the phone with German Chancellor Angela Merkel on Wednesday, the Turkish presidency said while he is due to speak with French President Emmanuel Macron on Thursday.

Washington warned more economic pressures may be in store for Turkey if it refuses to release Brunson, a White House official said on Tuesday.

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