Turkish President Recep Tayyip Erdogan’s move to double the tariffs on a range of American imports is “regrettable and a step in the wrong direction,” a National Security Council spokesperson told The Epoch Times.
Erdogan signed a decree on Aug. 15 that raises tariffs on American cars to 120 percent, on alcoholic drinks to 140 percent, and on leaf tobacco to 60 percent. The decree also doubled tariffs on American cosmetics, rice, and coal, among other imports.
“President Trump’s imposition of tariffs on steel and aluminum is about protecting American national security,“ the spokesperson said. ”But one could hardly say the same about Turkey’s announced tariffs on American cars, alcohol, and tobacco. This is regrettable and a step in the wrong direction.”
The two NATO allies are at an impasse regarding the detention of an American pastor, differing views on Syria, and Turkey’s purchase of Russian military equipment.
The growing tensions between Washington and Ankara have sent the Turkish currency tumbling to historic lows. The lira lost nearly 40 percent against the dollar this year and suffered a staggering collapse on the heels of Trump’s announcement of increased tariffs on metals.
Ankara’s central bank took actions to reinforce the currency on Aug. 15 and squeezed the Turkish lira’s liquidity from the market. The currency picked up 6 percent and strengthened briefly at just under 6 to the dollar.
The U.S. economy is 25 times larger than Turkey’s, based on nominal GDP. The United States was the fourth-largest source of imports to Turkey last year, accounting for $12 billion of imports, according to IMF statistics. Turkey’s exports to the United States last year amounted to $8.7 billion, making it Turkey’s fifth-largest export market.
Trump has repeatedly asked for Brunson’s release, while Ankara said the decision was up to the court. On Aug. 15, a Turkish court in the Aegean province of Izmir, where Brunson is on trial, rejected the pastor’s appeal to be released from house arrest. An upper court had yet to rule on the appeal, his lawyer told Reuters.
Washington warned more economic pressures may be in store for Turkey if it refuses to release Brunson, a White House official said on Aug. 15. White House press secretary Sarah Sanders that Washington will withdraw sanctions on Turkey if Brunson was set free. But the White House does not plan to lift the metals tariffs, which Sanders said were a national security issue.
Erdogan has said Turkey is the target of an economic war, and he has made repeated calls for Turks to sell their dollars and euros to shore up the currency. On Aug. 14, he said Turkey would boycott U.S. electronic products.
Lira Rebounds
Optimism about better relations with the European Union after a Turkish court released two Greek soldiers pending trial and a banking watchdog’s step to limit foreign exchange swap transactions have also helped the lira.“They are squeezing lira liquidity out of the system now and pushing interest rates higher,” Cristian Maggio, head of emerging markets strategy at TD Securities, said.
“Rates have gone up by 10 percent. ... The central bank has not done this through a change in the benchmark rates, but they are squeezing liquidity, so the result is the same.”
The lira firmed as far as 5.75 against the dollar on Aug. 15 and stood at 6.1320 at 8:43 ET in a move initially triggered by the Turkish court decision on the Greek soldiers who faced espionage charges.
