Turkey doubles tariffs on some U.S. goods amid rising tensions

Umit Bektas  Reuters

Albayrak emphasized that the dollar is being used as political punishment by the USA and this does not comply with diplomatic ethics, proving that the process Turkey is experiencing is unjust.

The development on Wednesday comes amid escalating tensions between Turkey and the United States, its North Atlantic Treaty Organisation ally.

"It took place on the margins of the North Atlantic Treaty Organisation summit", the source said.

"Actions that heighten these tensions risk spreading today's financial challenges to other emerging markets, to European banks, and, ultimately, to the USA economy". Brunson was moved to house arrest in July 2018. Earlier in August, his administration had levied sanctions against Turkey's justice and interior ministers, accusing them of playing "leading roles" in the organizations responsible for the arrest and detention of Pastor Andrew Brunson.

But Bloomberg analysts have cautioned Turkey's economic conflict with the USA could prompt Mr Erdogan to start looking for new allies.

Turkey has sharply raised tariffs on USA imports, including passenger cars, alcohol and tobacco.

On Tuesday the White House said President Trump was frustrated that Turkey had not released Andrew Brunson, the evangelical pastor held on terrorism charges that Washington believes are fabricated.

President Recep Tayyip Erdogan suggested that Turkey will stick to Samsung and Vestel if United States products are banned.

President Erdogan told political supporters in Ankara that he would start "a boycott against America's electronic goods".

"If they have the iPhone, there is Samsung elsewhere".

"If we divert our money to foreign currency.then we will be in the position of having surrendered to the devil", Erdogan said. "Erdoğan asked Trump for help with the lady in prison in Israel".

The Turkish lira has lost more than 45 percent of its value since 2017.

Erdogan has called on Turks to exchange their dollars for lira in order to shore up the domestic currency.

President Recep Tayyip Erdogan vowed to boycott iPhones in a demonstration of defiance as the USA held firm to its demand that Turkey release an evangelical pastor and Turkish executives called for action to bolster the lira.

The punitive measures pushed Turkey's currency lira into freefall and rattled the country's financial markets.

As Turkey's financial markets spiral down, threatening the country's economy, investors are gauging whether emerging markets as an asset class are in danger of falling out of grace. And, as Trump signaled in a recent tweet, "Anyone doing business with Iran will NOT be doing business with the United States".

How much has Turkey's currency dropped?

"Surely, Moscow might be happy to exploit this crisis especially as calls for boycotting iPhones could easily escalate to demands for reduced military cooperation, for example, with regard to Incirlik [Air Base] or other US-NATO facilities in Turkey at a time when Washington still doesn't have an ambassador there".

The lira had already rebounded about 8 percent on Tuesday on news of a planned conference call on Thursday in which the finance minister will seek to reassure global investors.

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