Published: Wed, August 15, 2018
Money | By Ethel Goodwin

Turkey doubles tariffs on some USA imports; Turkish lira rallies

Turkey doubles tariffs on some USA imports; Turkish lira rallies

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

Turkey on Wednesday announced tariff hikes on a range of USA goods in the latest back-and-forth move amid a deteriorating relationship between the two countries.

The currency strengthened to around 6.20 lira against the dollar on Wednesday after the government took steps to shore up the currency by reducing the daily limit in bank foreign currency swap transactions and amid news that the finance minister would address foreign investors on Thursday.

President of Turkey and the leader of the Justice and Development Party (AK Party) Recep Tayyip Erdogan.

Turkey's Vice President Fuat Oktay said on Twitter that the tariffs on certain products were increased "within the framework of the principle of reciprocity in retaliation for the deliberate economic attacks by the United States".

Trump, who has called Brunson's detention a "total disgrace", last Friday doubled tariffs on Turkish steel and aluminum exports in order to increase pressure on Erdogan.

U.S. Charge d'Affaires Jeffrey Hovenier talks to members of the media after visiting USA pastor Andrew Brunson, who is being held under house arrest in Izmir, Turkey, Aug. 14, 2018.

"We will impose a boycott on USA electronic products".

"The administration is going to stay extremely firm on this". But Sanders declined to say how the USA government plans to apply more pressure on Ankara, which repeatedly has ignored calls from Trump and others to free Christian pastor Andrew Brunson.

The US decision is another salvo in the growing dispute between Turkey and the US.

Earlier this month, Erdogan ordered the assets of two USA officials frozen in retaliation for sanctions imposed on Turkey's justice and interior ministers over the United States pastor's detention.

Fears over fallout from the Turkish Lira's recent drop lifted the US Dollar Index to its highest level since June previous year.

In a televised speech earlier, the Turkish President called on citizens to exchange foreign currency and gold for lira, calling it an "economic war". "Our relations with Turkey are not good at this time!" he wrote.

However the move failed to impress financial markets, which want to see a massive rate hike of as much as 1,000 basis points by Turkey to combat the lira's weakness and fight inflation.

The Trump administration has demanded that Brunson, a pastor from North Carolina who has lived in Turkey for decades, be allowed to return to the United States.

FILE - Russian S-400 air defense missile systems are on display during a rehearsal for the Victory Day military parade in Red Square in Moscow, Russia, May 7, 2017.

"It is wrong to dare bring Turkey to its knees through threats over a pastor", Erdogan said.

Russia's Foreign Minister Sergei Lavrov, who was visiting Ankara, branded the USA sanctions an "illegitimate policy" on Tuesday.

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