Erdogan says Turkey will boycott U.S. electronics, lira steadies

Andrew Cummings
August 16, 2018

After Turkish President Recep Tayyip Erdogan's appeal to boycott US electronic products on Tuesday, Erdogan signed a decree to raise tariffs on some USA imports including cars, alcohol and tobacco, state-run Anadolu agency quoted Turkish Trade Minister Ruhsar Pekcan as saying on Wednesday.

Qatar's emir headed to Turkey on Wednesday for talks with President Tayyip Erdogan who is dealing with a collapse of the lira currency and deteriorating relations with the United States.

The two countries also remain at odds over an American pastor who is now under house arrest in Turkey facing terrorism charges.

U.S. President Donald Trump and his vice president Mike Pence have repeatedly called for the pastor's release and have sanctioned two Turkish ministers after a Turkish court moved him to house arrest after 21 months in prison.

Tariffs were also increased on other U.S. goods, including cosmetics, rice and coal.

Turkey's Vice President Fuat Oktay wrote on Twitter that the doubling of tariffs was done "under the principle of reciprocity", in response to America's "conscious attacks on our economy".

The lira has lost almost 40 per cent against the dollar this year, driven by worries over Mr Erdogan's growing control over the economy and his repeated calls for lower interest rates despite high inflation.

On Tuesday, he said Turkey would boycott US electronic products.

With the pledge, Turkey is reaping the rewards of standing by its wealthy Arab ally while Gulf neighbors led by Saudi Arabia cut off diplomatic ties with Qatar a year ago.

A court in Izmir rejected the appeal, but a higher court would review the appeal, the report said.

"They will likely just give warm words to Turkey, looking to exploit the situation and stir things up for the USA and the West", said Timothy Ash, senior strategist at BlueBay Asset Management.

White House press secretary Sarah Sanders said the USA had seen "no evidence that Pastor Brunson has done anything wrong". While the decline accelerated last Friday after the Trump administration announced new tariffs on Turkey, the US denied responsibility for Turkey's economic state.

The lira TRYTOM=D3, which has weakened 36 percent against the dollar this year, eased to 5.98 against the dollar by 0443 GMT from a close of 5.95, as investors weighed up the latest comments from the United States. "If they have the iPhone, there is Samsung", the Turkish president said.

Erdogan says 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 national currency. "The tariffs are specific to national security", she said.

A White House official warned on Tuesday of additional economic sanctions or other pressures if Turkey continues to refuse to release Brunson. That fueled a relatively high rate of economic growth-7 percent past year.

Asked what the USA would view as progress in resolving the dispute, she replied, "Progress is having Pastor Brunson on a plane, coming back to the United States".

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