Trump doubles tariffs on Turkey, stoking jitters

Trump doubles tariffs on Turkey, stoking jitters

It did not disclose details, but suggests Turkey might gravitate further away from its North Atlantic Treaty Organisation allies towards co-operation with Russian Federation, whose relations with the West are at their lowest since the Cold War.

President Trump ordered a doubling of US tariffs on steel and aluminum imports from Turkey Friday, escalating a diplomatic spat with a key North Atlantic Treaty Organisation ally. Aluminum will now be 20% and Steel 50%.

Trump also declared, "Our relations with Turkey are not good at this time!"

Turkey is world's sixth-biggest steel producer, and eighth largest steel importer for the U.S. according to the International Trade Administration.

The Turkish President, Recep Tayyip Erdogan, took a combative stance in an earlier press conference, pledging to "overcome this economic war".

A favourable exchange rate though can't have harmed the situation: on Friday, the U.S. dollar would buy nearly six Turkish lira; at the end of January, it would have got you less than four.

The US president revealed the action on Friday as he noted how the Turkish lira "slides rapidly downward" against the "very strong" US dollar.

In this file photo taken on July 11, 2018, US President Donald Trump (L) speaks with Turkey's President Recep Tayyip Erdogan (R) as they arrive for a North Atlantic Treaty Organisation summit at North Atlantic Treaty Organisation headquarters in Brussels.

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Erdogan and his newly appointed finance minister, Berat Albayrak, are due to speak at 2 p.m. local time Friday.

Turkey accounted for 373 million euros of BBVA's its first half net attributable profit, 14 percent of the group total, suggesting that it may be the most vulnerable to the country's market turmoil.

The situation was compounded on Friday when US President Donald Trump tweeted that he had authorised a doubling of tariffs on steel and aluminium. The Lira has lost almost a third of its value this year, as relations with the United States have become increasingly strained.

Economic experts believe the sharp fall of the lira is mainly because of concerns about the government's economic policies. Turkey answered the March tariff announcement by placing its own tariffs on $267 million of US goods. The currency has fallen 66 per cent since the start of the year, pushing up the cost of goods for Turkish people and shaking global investors' confidence in the country.

Without naming countries, Erdogan said supporters of a failed military coup two years ago, which Ankara says was organized by a US -based Muslim cleric, were attacking Turkey in new ways since his re-election two months ago to a new executive presidency.

His characteristic defiance has further unnerved investors. But this seems less likely as Erdogan and his mouthpieces in the media cast the United States' moves as some kind of epic battle to wreck Turkey, and Trump just gave them fresh ammunition. His comments on interest rates - and his recent appointment of his son-in-law as finance minister - have heightened perceptions that the central bank is not independent.

"President Erdogan's strengthened powers under the new presidential system have made it increasingly uncertain whether policymakers will be able to act to stabilise the economy", said William Jackson, chief emerging markets economist at Capital Economics in London. "Our relations with Turkey are not good at this time!"

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