Turkey fires back with tariffs on US cars, alcohol, cosmetics

Ivan Schwartz
August 16, 2018

The investment will be channeled into Turkish financial markets and banks, a government source told Reuters.

The lira firmed as far as 5.75 against the dollar on August 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.

Lira has lost around 40% against the USA dollar this year, due to worries over Erdogan's growing control over the economy and his repeated calls for lower interest rates despite high inflation.

Turkey's move to increase tariffs on U.S. imports has helped boost its weakened currency.

The U.S. hit Turkey with sanctions and a doubling of tariffs on steel and aluminum.

The White House called the Turkish response a step in the wrong direction.

A White House official warned on Tuesday of additional economic sanctions or other pressures if Turkey continues to refuse to release Brunson.

Erdogan also said that the country could depend on Venus and Vestel, two of Turkey's domestic smartphone brands. "The tariffs are specific to national security", Ms Sanders said.

Speaking to a group of foreign ambassadors in Ankara on Wednesday evening, Foreign Minister Mevlut Cavusoglu appeared to extend an olive branch to US President Donald Trump's administration.

Kalin also told a news conference on Wednesday that Turkey will take a positive stance towards trading in national currencies to escape from United States dollar pressure.

As well as Brunson, whose appeal for release was turned down on Wednesday, Turkey is holding United States consular staff who are Turkish nationals as well as U.S. citizens, including NASA scientist Serkan Golge.

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The Turkish lira rebounded some six per cent on Wednesday after the central bank squeezed lira liquidity in the market, effectively pushing up rates and supporting the currency. That fueled a relatively high rate of economic growth-7 percent a year ago.

Measures to restrict the amount of currency that can be exchanged with foreign banks were also said to be boosting the currency.

On Wednesday, the lira traded at 6.4125 to the US dollar, weakening from a close of 6.3577 a day earlier. By driving up short-term borrowing costs, this makes it less appealing for investors, like hedge funds, to borrow liras on the offshore swap market so they can bet against, or short, it.

Russia backs using national currencies, not the U.S. dollar, in its trade with Turkey, Russian Foreign Minister Sergei Lavrov said on Tuesday, but he made no firm commitments that would immediately help Ankara to weather its currency crisis.

As a court in the western Turkish city of Izmir rejected a new appeal to free Brunson on Wednesday, spoksman Kalin said the United States needs to be respectful of the judicial procedures in Turkey.

'The import duties were increased on some products, under the principle of reciprocity, in response to the US administration's deliberate attacks on our economy, ' Vice President Fuat Oktay wrote on Twitter.

With the pledge, Turkey is reaping the rewards of standing by its wealthy Arab ally while Gulf neighbors led by Saudi Arabia cut off diplomatic ties with Qatar a year ago. Other foreign policy experts worry that the rift could hurt cooperation between the USA and Turkey in its fight against the Islamic State in Syria.

Brunson, a native of North Carolina who had been preaching Christianity in Turkey for decades, was arrested back in 2016 under President Recep Tayyip Erdoğan's crackdown on dissidents following a failed military coup against him.

Trump has repeatedly asked for Brunson's release, while Ankara said the decision was up to the court. In the ruling it stipulated Brunson, who faces 35 years in jail over terror and espionage charges, will remain in detention. Brunson's lawyer told Reuters that the appeal could be heard sooner that the usual three to seven days.

Turkish President Tayyip Erdogan has said in recent public speeches that Turkey and its economic allies do not need to use the dollar to conduct bilateral trade.

Other reports by GizPress

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