Published: Sat, August 11, 2018
Business | By Eloise Houston

Trump doubles tariffs on Turkish steel and aluminum, says relations ‘not good’

Trump doubles tariffs on Turkish steel and aluminum, says relations ‘not good’

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The Turkish lira plunged 20% Friday after President Trump announced he would be doubling the import tariff on metal produced in that country, sending Turkey's currency to a record low against the USA dollar.

US President Donald Trump is doubling tariffs imposed on Turkish steel and aluminum, insisting that the relationship between the two countries is 'not good'. -Turkish tensions are threatening a financial crisis in Turkey. The lira fell further after Trump's tweet.

Domestic data showed, Canadian economy unexpectedly added 54,100 jobs in July and the unemployment rate dipped to equal a record low of 5.8 per cent. The lira has fallen about 40 percent against the dollar this year.

"The Turkish Lira is in a state of crisis, as a result of investor confidence in Turkish assets remaining at alarmingly low levels", said Jameel Ahmad, Global Head of Currency Strategy & Market Research at FXTM.

Last week, Erdogan called on Turks to convert their foreign currency and gold into Turkish lira to help the currency. "It is a national fight".

President Donald Trump said on Friday he had authorized higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminum and 50 percent one on steel, as tensions mount between the two North Atlantic Treaty Organisation allies over Ankara's detention of an evangelical pastor and other diplomatic issues.

"Don't forget, if they have their dollars, we have our people, our God", he said.

The news comes as tensions between the United States and Turkey continue to grow over the North Atlantic Treaty Organisation ally's continued detainment of Pastor Andrew Brunson.

Turkey's iron, steel and aluminum exports to the US were $1.1 billion in 2017 - 0.7 percent of the total exports.

On June 21, Turkey's retaliatory tariffs went into effect on 4 to 70 percent of more than $1 billion worth of US goods. President Erdogan has pressured the central bank to maintain low interest rates by refraining from implementing much-needed hikes.

But Aykan Erdemir, of the Foundation for Defense of Democracies, said Mr Trump's tariffs announcement comes "at the worst possible time for Mr Erdogan" and fits with USA strategy to increase pressure on Ankara until Mr Brunson is released.

Officials from Mr Erdogan's office said the two men "expressed pleasure" that relations between Turkey and Russian Federation were progressing "positively" amid joint defence and energy projects.

It added that Trump´s remarks were "not possible to reconcile with state seriousness".

Investors have become increasingly concerned with the faltering Turkish economy, its central bank's willingness to respond to the downturn and the impact it could have on global financial markets, according to multiple reports.

A statement from the Kremlin said the two leaders discussed economic and trade ties.

Sweating profusely during his speech, and refusing to take questions afterwards, Albayrak backed the independence of the country's central bank.

Turkey's ever combative President Recep Tayyip Erdogan vowed to not bow to economic pressure. The dollar, which traders buy in times of financial concern, was up against most other currencies.

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

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