Turkey hikes tariffs on US

Jeannie Matthews
August 16, 2018

It doubles retaliatory tariffs on American cars to 120% and on alcoholic drinks to 140%, according to a notice published by the Turkish government.

Turkey and Qatar have traditionally maintained good ties and Ankara stood by Doha after Saudi Arabia and other Arab states severed diplomatic, trade and travel ties with Qatar a year ago, accusing it of financing terrorism, a charge Doha denies.

Turkey has been thrown into crisis mode over the past week after US President Donald Trump doubled steel and aluminium tariffs on the country, sending the value of the lira into free-fall.

The move comes amid increased tension between the two North Atlantic Treaty Organisation allies over Ankara's imprisonment of a pastor and other diplomatic issues, which has sent the lira tumbling to record lows against the U.S. dollar. He also imposed extra tariffs on other products like cosmetics, coal and rice.

"Tax rates on imports of some products have been increased on a reciprocal basis against the USA administration's deliberate attacks on our economy", the country's vice president, Fuat Oktay, said in a pair of tweets.

A Turkish court on Tuesday released two Greek soldiers detained since March on espionage charges for illegally crossing the border in a case that has stoked tensions with Brussels.

It was also helped by a step from the banking watchdog BDDK, cutting the limit for Turkish banks' forex swap, spot and forward transactions with foreign banks to 25 percent of a bank's equity.

Moves by the central bank to ensure Turkish banks have liquidity and a planned conference call by Turkish Finance Minister Berat Albayrak, who is Erdogan's son-in-law on Thursday have gone some way to giving reassurance to investors.

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Markets have been concerned by Erdogan's influence over the economy and his resistance to interest rate increases to tackle double-digit inflation.

Overall, the duties will amount to 533 million dollars (£417 million), a relatively small sum meant as retaliation for U.S. president Donald Trump's recent decision to double tariffs on Turkish steel and aluminium.

The two sides are at somewhat of a standoff over the release of American pastor Andrew Brunson, who's been detained in Turkey for almost two years now.

Trump has repeatedly asked for Brunson's release, while Ankara said the decision was up to the court.

Apple has 22 per cent of the smartphone market in Turkey, where 11.4 million units were sold previous year, according to Ramazan Yavuz, research manager at IDC consultancy company.

Erdogan has said Turkey is the target of an economic war, and has made repeated calls for Turks to sell their dollars and euros to shore up the currency.

As NPR explained in a primer on the dispute, much of the ill will shared by Turkey and the US stems not only from the back-and-forth on tariffs, but also from a diplomatic dust-up centered on two men of faith.

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