Turkey shaken by financial fears; Trump rattles it further
A financial shockwave ripped through Turkey on Friday, when its currency nosedived on concerns about its economic policies and a dispute with the U.S., which President Donald Trump stoked further with a promise to double tariffs on the NATO ally.
The lira tumbled 14 percent in one day, to 6.51 per dollar, a massive move for a currency that will make the Turkish poorer and further erode international investors’ confidence in the country.
The currency’s drop – 41 percent so far this year – is a gauge of fear over a country coming to terms with years of high debt, international concern over President Recep Tayyip Erdogan’s push to amass power, and a souring in relations with allies like the U.S.
The diplomatic dispute with the U.S. was one of the triggers that turned market jitters into a full-blown route this week.
Turkey has arrested an American pastor and put him on trial for espionage and terror-related charges linked to a failed coup attempt in the country two years ago. The U.S. responded by slapping sanctions on Turkey and threatening more.
The sides had talks in Washington this week but failed to resolve the spat, and Trump took advantage of Turkey’s turmoil Friday to turn the screws on the country.
Trump said the tariffs on aluminum imports would be increased to 20 percent and those on steel to 50 percent as the Turkish lira “slides rapidly downward against our very strong Dollar!”
Trump made the 50 percent steel tariff official with a presidential proclamation Friday evening.