Turkey has dared the United States over recent economic sanctions and tariff increases on its steel and aluminium while blaming the US for the free fall of the Lira, the Turkish currency.
Turkey’s President, Erdogan, pledged to defy what he describes as United States attempts to weaken his country’s economy, rallying supporters a day after Washington imposed even higher tariffs on Turkish metals which sent the Turkish Lira tumbling.
Turkey and The United States are NATO allies that have been at loggerheads for a while now due to a range of issues.
Both Countries have divergent interests in Syria, while The United States is opposed to Turkey buying military hardware from Russia as well as the continued detention of a US evangelical pastor who is on trial in Turkey on charges of terrorism.
While relations between Turkey and the United States worsen, the Turkish lira has lost more than 30 percent of its value against the US dollar since the start of the year.
The decision on of the United States President, Donald Trump to double steel and aluminium tariffs on Turkey sent the Lira tumbling further than 18.5 percent at one point.
Reacting to the situation President Erdogan said the United States would pay a price for challenging Turkey for the sake of petty calculations and denounced Washington for declaring an economic war on the entire world and holding countries for ransom through threats of economic sanctions.
He further described Dollars, Euros and gold as the “bullets, cannonballs and missiles of the economic war being waged against our country.“Those who can’t compete with us on the ground have brought online fictional currency plots that have nothing to do with the realities of our country, production and real economy. The country is neither crumbling nor being destroyed or bankrupt or in a crisis,”
Mr. Erdogan added that the way out of the “currency plot” was to boost production and minimise interest rates. He also told Turkish citizens to exchange all their Euros and Dollars for the Turkish Lira.
Investors have expressed concerns that the Turkish economy is overheating and could be set for a hard landing, while concerns over the dispute with the US have also hit Turkish stocks.
The fall of the Turkish Lira has also raised concerns in the European Union regarding the exposure of some the bloc’s biggest banks to Turkey.
According to a financial expert with the European Union, Sevla Tor,
“There is a currency crisis, kind of promoted by the geopolitical risks, and which is obviously used by the American foreign policy decision-makers.”
The United States increased economic sanctions on Turkey partly because of the continued detention of US evangelic Pastor, Andrew Brunson who was arrested and imprisoned in 2016.
Pastor Brunson is being tried on terrorism charges tied to the failed coup on President Erdogan in 2016 and has been recently moved from prison detention to House detention due to his failing health.