Commenced from an imprisonment of an American pastor, the economic war between the US and Turkey is just intensifying with time. Taking an extraordinary step on Wednesday, Turkey changed the situation for itself.
Despite being caught in a downward slope of currency and debt, Turkey on Wednesday slapped hefty tariffs on several American imports, further spiking the economic and diplomatic feud with the Trump administration.
On his Twitter, Fuat Oktay, Turkish vice president, wrote that the retaliatory trade measures came in reaction to “the deliberate attack of the US Administration on our economy.”
Turkish president Recep Tayyip Erdogan announced tariffs on American cars, rice, makeup, alcohol, tobacco, and other products. The tariffs raised were massive, including 140 per cent on alcohol and 120 per cent on cars.
On Tuesday, the currency of Turkey, the lira, descended to record a low against the dollar. However, after Erdogan imposed tariffs on US goods, and Qatar announced to invest $15 billion in Turkey’s economy, the currency stabilized a bit.
The diplomatic spats between the US and Turkey escalated as a result of a disagreement over the imprisonment of North Carolina Pastor Andrew Brunson in Turkey. Trump referred Brunson as a “great Christian”. He was detained by the Turkish government in October 2016, and was alleged to have ties to the Gülen movement, considered a terrorist group by the Turkish government.
In July, the Trump administration sanctioned two top officials in the Turkish government, when Turkey failed to release Brunson. When Erdogan didn’t change his decision even after that, the US President doubled the existing tariffs on steel and aluminium.
Erdogan has remained obstinate in the face of US pressure. Other than raising the tariffs, Erdogan had promising to boycott the foreign products, including iPhones. On the other hand, in his typical style, Trump has given no sign that he’s willing to pull back.
Despite recovering its currency successfully, the risks for Turkey remain relatively greater. This is because the problems of President Erdogan are much severe than the ongoing spat with the Trump administration.
The economic situation of Turkey has been fortified by Erdogan’s authoritarian government and economic mismanagement. With most of their borrowing in dollars and greater dependency on foreign investments. A number of businesses failed to repay their loans with low-valued lira. The crisis was on horizon even before, which might just amplify with Trump’s involvement.