Currency crisis, tension with U.S. are weighing on Turkey

Alicia Cross
August 17, 2018

Turkey's President Recep Tayyip Erdogan has said his country will boycott U.S. electronic products, after Washington imposed punitive sanctions on Ankara.

The Trump administration assailed retaliatory tariffs imposed by Turkey on $1 billion of USA goods as the standoff between the two North Atlantic Treaty Organisation allies over the detention of an American pastor worsened.

The pastor row is one of several between the North Atlantic Treaty Organisation allies, including diverging interests in Syria and USA objections to Ankara's ambition to buy Russian defense systems, that have contributed to instability in Turkish financial markets.

It is believed many Qatari investors could be at risk from a Turkish economic crisis. Turkey is deeply divided between Erdogan's pious Muslim base and secular Turks who once held sway over the country, but opposition voices have been mostly muted as Erdogan, who has concentrated power in a new presidential system of government, projects an image of a righteous state under siege.

Turkey retaliated on Wednesday with tariffs on certain USA goods. "After the spike of the USA dollar, prices of foreign products have increased dramatically and the consumer has no purchasing power".

"They don't hesitate to use the economy as a weapon", the president noted, suggesting that Turkey may soon boycott American electronics, including the iPhone. "I'm looking for something that's secondhand". While many in the country believe the crisis is the fault of the US, even though experts have been warning of danger signs in the economy for months, Williams says some Turks do blame authoritarian President Erdogan for the crisis.

According to the Hurriyet Daily, a significant number of importers began to withdraw their short and long-term orders after Turkish President Recep Tayyip Erdogan's appeal to boycott American electronic products on Tuesday.

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Tensions between the two nations has sent the Turkish lira to record lows and has weighed on global financial markets. In a sign the conflict is far from over, White House spokeswoman Sarah Sanders said USA tariffs announced last week will stay in place regardless of whether an American pastor detained in Turkey is freed.

The lira, which has lost about 40 percent of its value this year, recovered a little on Wednesday after the Turkish government took steps to support it.

President Donald Trump doubled tariffs on Turkish metals exports to the United States last week prompting Turkey, which says it will not bow to threats, to raise tariffs on USA cars, alcohol and tobacco by the same amount on Wednesday.

Sanders said that even if Erdogan releases the USA clergyman, the additional tariffs on Turkish steel and aluminum won't be lifted because they are based on "national security".

Turkish President Tayyip Erdogan and French President Emmanuel Macron spoke by phone on Thursday and stressed the importance of developing economic and trade ties and boosting bilateral investment, a Turkish presidential source said. "Pastor Brunson is perhaps the tip of the iceberg".

"No one has an interest in the economic destabilization of Turkey", Merkel said in Berlin this week. Then last week, Trump increased them to 50 percent on Turkish steel and 20 percent on Turkish aluminum. "The customer isn't buying anything right now".

Other reports by Free-Prsite

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