Published: Sun, August 12, 2018

Erdogan: Turkey a ‘target of economic war’

Erdogan: Turkey a ‘target of economic war’

President Donald Trump announced Friday that he plans to double steel and aluminum tariffs on Turkey - prompting the lira to plunge 20 percent - amid heightened tensions between the two North Atlantic Treaty Organisation allies.

Turkish President Tayyip Erdogan has remained defiant despite the lira being in free fall.

The lira tumbled 14 percent in one day, to 6.51 per dollar - a massive move for a currency that will make the Turkish poorer and further erode worldwide investors' confidence in the country.

Earlier on Friday the lira plunged as much as 14 percent on as worries about Erdogan's influence over monetary policy and worsening USA relations snowballed into a market panic that also hit shares of European banks.

The 64-year-old also highlighted the major difficulty in battling the Kurdish insurgency which has full U.S. support for fighting Islamic State fighters in northern Syria.

The currency, which traded 4.7 to the dollar a month ago, has now weakened to 6.4 to the dollar, having lost more than 30% of its value this month, 20% of which accrued in the last 24 hours.

President Donald Trump announced in a tweet that he would be increasing the rate of existing tariffs against Turkey, as the value of the Turkish lira plunges.

"Our relations with Turkey are not good at this time!" he added.

"In that sense, the Turkey situation can be a contagion not only in Europe but across emerging markets", Anderson said. Financial upheaval there risks further destabilizing an already volatile region.

Mr Erdogan has spoken out after US President Trump doubled punishing tariffs on the nation adding that those responsible "think they can destroy Turkey". "Aluminum will now be 20 percent and Steel 50 percent", he said in a Twitter post.

The White House said Mr Trump had authorised them under a section of United States trade law that allows for tariffs on national security grounds.


"Turkey expects other member countries to abide by worldwide rules", the country's trade ministry said in a statement.

In a tweet on Friday, Foreign Ministry Spokesman Hami Aksoy said President Donald Trump's decision, which also violates the rules of World Trade Organization, "cannot be associated with seriousness expected from a state". He has denied the charges.

A Turkish delegation met with officials from the departments of State and Treasury earlier this week as both sides sought a way out of the rising tensions. The lira fell further as Erdogan spoke.

"Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks. This is a national, domestic battle", he told a crowd in the northeastern city of Bayburt.

"Some countries have engaged in behavior that protects coup plotters and knows no laws or justice", he said.

A financial shockwave ripped through Turkey on Friday when its currency nosedived over concerns about the country's economic policies and a deepening row with the US.

In an opinion article published in the New York Times on Saturday, Erdogan wrote that Turkey and the USA had been strategic partners and North Atlantic Treaty Organisation allies for the past six decades and that his country had repeatedly come to America's aid.

"Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies", Erdogan said. And it is not too far away from the level at which Goldman Sachs warned Turkey's banks would run out of the extra capital they had built up as a buffer against a crisis.

The U.S. responded by slapping sanctions on Turkey and threatening more.

On Friday afternoon Erdogan dug in again, calling for citizens to convert out of dollars and gold and buy the lira to help fight a "national struggle".

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