Turkey is 'target of economic war', Turkish president says
- by Thibaud Popelin
- in Monde
- — Aoû 13, 2018
Relations between the two North Atlantic Treaty Organisation allies have sunk to their lowest point in decades over a number of issues including the detention of U.S. pastor Andrew Brunson on terror-related charges, prompting the Turkish lira to hit record lows against the dollar.
Trump said he had authorised higher tariffs on imports from Turkey, imposing a 20 per cent duty on aluminium and 50 per cent one on steel.
The lira, which had already lost one-third of its value this year largely over worries about Erdoğan's wider control of the economy, is at a fresh record low, at one point losing 18%, its biggest fall since 2001.
One of the hard issues affecting U.S.
Turkey and the United States squabbled last week over Turkey's failure to free a US pastor named Andrew Brunson from house arrest while he awaits his trial on terrorism charges. "During this period, Turkey has set records in its exports, production and employment", Erdogan said.
In a separate opinion piece in the pro-government newspaper Daily Sabah, Erdogan's spokesman Ibrahim Kalin said Turkey's efforts to solve the crisis with diplomatic methods had been dismissed by the Trump administration, warning that "the US runs the risk of losing Turkey" as an ally.
"Unless the United States starts respecting Turkey's sovereignty and proves that it understands the dangers our nation faces, our partnership could be in jeopardy", he wrote.
Trump's tweet caused a further drop in the Turkish currency, which is now down 13 percent on the day.
The latest tariffs stem from the trade fight Trump launched earlier this year with several countries, including Turkey, according to the Washington Post.
It did not disclose details, but suggests Turkey might gravitate further away from its North Atlantic Treaty Organisation allies towards co-operation with Russian Federation, whose relations with the West are at their lowest since the Cold War.
While Turkey's economy is only the 17th largest in the world, there are a number of concerns that Trump's latest trade war is only further disrupting global commerce, damaging longtime alliances, and threatening global economic growth. He claims higher rates lead to higher inflation - the opposite of what standard economic theory says.
The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten monetary policy at its last meeting.
"Contagion risks center on Spanish, Italian and French banks exposed to Turkish foreign currency debt, as well as Argentina and South Africa", warned analysts at ANZ. "You are exchanging your strategic partner in North Atlantic Treaty Organisation for a priest".
"This is a national, domestic battle".
On Saturday, Turkish president Recep Tayyip Erdogan warned the United States that it could lose a "strategic partner", declaring a rally: "We only bow before God".
Speaking in the northeastern province of Rize, President Recep Tayyip Erdogan said that dollars, euros and gold were now "the bullets, cannonballs and missiles of the economic war being waged against our country".
