Trump doubles tariffs on Turkey, stoking jitters

The lira went into free-fall sinking more than 10 percent

The lira went into free-fall sinking more than 10 percent

One of the triggers of the turmoil has been a standoff with the USA over a detained American pastor that Turkey, a North Atlantic Treaty Organisation ally, has put on trial for espionage and terror-related charges linked to a failed coup attempt in the country two years ago.

US President Donald Trump is doubling tariffs imposed on Turkish steel and aluminum, insisting that the relationship between the two countries is 'not good'.

'If they have their dollar, we have the people, we have Allah, ' he said.

In the first three months of 2018, Turkish steel exports to the United States fell almost 50 percent over the same period in 2017, making it the only top-10 source of US steel imports to see a decrease, according to the US Commerce Department. "Our relations with Turkey are not good at this time!" he noted.

The Turkish lira plunged on Friday, raising questions about the country's financial stability, as investors anxious about the president's unorthodox economic policies and a dispute with the United States that has led to sanctions.

The Trump administration's original move in March to raise tariffs on most steel and aluminum imports was proposed to safeguard United States jobs against overseas rivals.

The embattled Turkish lira tumbled over 16 percent to new record lows against the dollar on Friday as strains with the United States intensified, but President Recep Tayyip Erdogan defiantly proclaimed Turkey would emerge victorious in an "economic war".

"Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks".

The lira plunged to as low as 6 against the USA dollar on Friday, a day after a Turkish delegation returned from talks in Washington with no apparent solutions to their simmering crisis.

Investors in Turkey are also anxious about President Erdogan's interference in the country's central bank. -Turkish relations is a dispute over an American clergyman who has been jailed in Turkey since December 2016. The lira fell further after Mr Trump's tweet.

The announcement intensified fears that USA sanctions on Russian Federation may not recede anytime soon.

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Trump intensified the alarm on financial markets with a new tweet on the Turkey row.

A delegation of Turkish officials held discussions with their counterparts in Washington this week but there was no sign of a breakthrough.

"The situation of Turkey can not go on for much longer - I think they will have to intervene", Cristian Maggio, head of emerging markets strategy at TD Securities, adding that the intervention needed to be "drastic".

Turkey's treasury and finance minister Berat Albayrak - who is Mr Erdogan's son-in-law - tried to ease investor concerns during a conference, saying the government would safeguard the independence of the central bank.

"Unless the United States starts respecting Turkey's sovereignty and proves that it understands the dangers that our nation faces, our partnership could be in jeopardy", he wrote.

The U.S. was the top destination for Turkish steel exports in 2017, which were worth $1.1 billion.

A Turkish man waits to change his USA dollars with Turkish liras inside a currency exchange shop in Ankara, Aug. 10, 2018.

Erdogan on Thursday portrayed the currency drop as a "campaign" to harm Turkey and called on the people not to worry.

The meetings came as Turkey seeks to stanch an economic meltdown amid fallout from USA sanctions imposed last week over the continued detention of the pastor, Andrew Brunson, who was jailed on espionage and terrorism suspicions more than two years ago and recently released to house arrest.

Relations are also tense because of new U.S. Conservative evangelical Protestants are a key constituency at home for U.S. President Donald Trump.

Has the moment finally arrived when political and economic ties between Turkey and the USA snap, ending what was a very close partnership dating back to the late 1940s?

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