Turkey doubles tariffs on some USA imports over economy "attacks"

LEADING ARTICLEAugust 13 2018 5:00pm The Times Tantrum in Turkey Erdogan should end his spat with the West if he wants to avert a deeper crisis

"We will boycott U.S. electronic goods", Erdogan said in a televised speech, raising the stakes in a spat that has seen the Turkish lira plunge to record lows.

As President Recep Tayyip Erdogan intensified a diplomatic feud with his US counterpart Donald Trump with a spate of new import tariffs, the nation's banking regulator published new rules that have so far succeeded at lifting the lira off record lows.

Stocks were weaker in most major Asian markets today, with Turkey's financial crisis showing little sign of abating as Ankara hiked tariffs on several USA goods in a tit for tat move. He showed no signs of backing down in the stand-off and suggested that Turkey would stop procuring US-made iPhones and buy Korean Samsung or Turkish-made Vestel instead.

If Brunson is not released, the next escalatory measure by the USA would most likely be targeted sanctions on businesspeople with close ties to President Recep Tayyip Erdoğan.

Turkey has doubled tariffs on some imports from the United States, such as passenger cars, alcohol and tobacco, in what its vice president said was a response to deliberate USA attacks on the Turkish economy.

Neither the White House, Turkey's Ministry of Foreign Affairs nor Apple immediately responded to a request for comment.

Following the Qatar news, the lira firmed briefly to 5.8699 from 6.04 to the dollar, before easing back to 6.0500 by 1658 GMT.

The Turkish lira rebounded 6% in Tuesday trading, haven fallen 25% in the past month, weighed down by the spat with the USA and wider concerns about the country's stalling economy. Brunson has lived in Turkey for 23 years, but his case has been taken up as a cause for the USA government. Brunson's lawyer told CBS News that a higher court was still considering the appeal and could overrule that decision.

The Turkish unit had been under pressure for weeks over growing concerns about the health of the economy but the currency slumped on Friday and Monday, when US President Donald Trump announced Washington was ramping up aluminium and steel tariffs.

Brunson, who has lived for two decades in Turkey, was arrested in 2016 and charged with having terrorist connections.

TUSIAD, the Turkish Industry and Business Association, and TOBB, the Union of Chambers and Commodity Exchanges of Turkey, urged "diplomatic efforts to urgently resolve the problems in the US-Turkey relationship", according to a report in The Financial Times.

"What you want to see is tight monetary policy, a tight fiscal policy, and a recognition that there might be some short-term economic pain-but without it there's just no credibility of promises to restabilize things", said Craig Botham, Emerging Markets Economist at Schroders.

"Together with our people, we will stand decisively against the dollar, forex prices, inflation and interest rates".

The second is that Erdogan would have to bury his hatchet with the United States, which remains the IMF's largest shareholder.

The currency drop is particularly painful for Turkey because it has accumulated a high debt in foreign currencies.

"They don't hesitate to use the economy as a weapon", the president commented, referring to the US.

On Wednesday, Turkey rejected pastor Andrew Craig Brunson's appeal to be released from custody, and slapped additional tariffs on US imports.

But the U.S. insists Andrew Brunson, a long-time Turkish resident who ran the tiny Izmir Resurrection Church, is "a victim of unfair and unjust detention".

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