Turkish Currency Collapses After Trump Doubles Metals Tariffs

People look at foreign exchange rates in Ankara, Turkey, on Aug. 10, 2018. Adem Altan/AFP/Getty Images

The Turkish lira hit a record low on Aug. 10 after President Donald Trump authorized the doubling of tariffs on imports of Turkey’s steel and aluminum.

The currency slid nearly 8 percent in relation to the dollar to a record low of 6.59 shortly after Trump announced the increase on metals duties on Twitter.

“I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!” Trump wrote.

Washington is in a standoff with Ankara over the imprisonment and house arrest of American pastor Andrew Brunson. Trump and Vice President Mike Pence threatened on July 26 to impose sanctions on Turkey if the pastor is not set free and allowed to return to the United States.

The White House followed through on that threat on Aug. 1 and sanctioned two top Turkish officials linked to Brunson’s ordeal. Two days later, Secretary of State Mike Pompeo warned that Turkey that the “clock had run out“ to release Brunson.

Turkish President Recep Tayyip Erdoğan struck a defiant note in a series of Twitter messages shortly before Trump’s announcement.

“When it comes to cornering Turkey to extract certain concessions that undermine our sovereign rights, it is a whole another story. At this point, we do not play ball. Tanks, warplanes could not scare our people. Do you think such threats will?” Erdogan wrote.

State Department Spokesperson Heather Nauert told reporters on Aug. 9 that the United States would define progress in relations with Turkey with Brunson’s return to the United States. Nauert declined to comment on ongoing negotiations.

Turkey has defied the United States on several fronts. Turkey’s energy minister announced on Aug. 8 that Turkey will keep buying liquid natural gas from Iran in violation of U.S. sanctions.

In June, the U.S. Senate passed a bill prohibiting Turkey from buying F-35 fighter jets because of Brunson’s imprisonment and Turkey’s purchase of Russia’s S-400 air defense system.

“As he stated, the President has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey,” said White House spokesperson Lindsay Walters.

“Section 232 tariffs are imposed on imports from particular countries whose exports threaten to impair national security as defined in Section 232, independent of negotiations on trade or any other matter.”