Turkey's floundering economy exacerbated by Trump tariffs

Turkish delegation returns home after meeting in US

Turkey's floundering economy exacerbated by Trump tariffs

Erdogan has been putting pressure on the central bank not to raise interest rates in an attempt to help borrowers.

Mr Trump has insisted that Mr Brunson, who has lived in Turkey for more than 20 years, be released "without delay"; Mr Erdogan insists his government can not interfere with the judicial process.

President Recep Tayyip Erdogan also said that Turkey would prepare to trade with its key partners in local currencies so that it and its allies would not be dependent on the dollar.

Relations between the two North Atlantic Treaty Organisation allies have sunk to their lowest point in decades over a string of issues including the detention of United States pastor Andrew Brunson on terror-related charges, prompting the lira to hit record lows against the dollar.

US President Donald Trump on Friday announced the US was doubling tariffs on steel and aluminium imports from Turkey, saying relations with Ankara were "not good at this time".

The dispute between the two North Atlantic Treaty Organisation allies - which reached new intensity over the detention of an American pastor in Turkey - has hammered the lira and also raised questions over the future partnership between Washington and Ankara.

The White House has said the newly-imposed sanctions would take effect from August 13. "We care about the law, the language of the law", he said about the USA policy during a rally in the Black Sea city of Ordu hit by floods that harmed hundreds of homes and businesses.

"Interest rates should be kept to a minimum because they are a tool of exploitation that makes the poor poorer and the rich richer", he said. "Immediately give these to the banks and convert to Turkish lira and by doing this, we fight this war of independence".

Addressing for the first time on Friday to a rally of his supporters, he said, "If they have dollars, we have our people, we have our right and we have Allah!"

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Later, the Canadian government called for the immediate release of jailed activists. Morneau said the Canadian economy is strong.

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The lira's free-fall was the result of a foreign plot and did not reflect Turkey's economic fundamentals, he said. On Friday, The New York Times published an article by Erdogan himself.

The United States is the biggest destination for Turkish steel exports with 11% of the Turkish export volume.

Turkey's President Recep Tayyip Erdogan on Saturday accused the USA of exchanging its "strategic North Atlantic Treaty Organisation ally with a pastor", remarks that questioned why Washington was seeking to free its citizens detained by Ankara, including Pastor Andrew Brunson who has become the eye of a diplomatic storm between the two nations.

The sanctions will freeze the U.S. assets of Turkey's minister of justice, Abdulhamit Gul, and its minister of interior, Suleyman Soylu.

Paul Greer at Fidelity International said dramatic interventions were now needed as Turkey faced a "downward spiral" of investor confidence.

"The US has to rehabilitate its addiction to sanctions [and] bullying or entire world will unite - beyond verbal condemnations - to force it to".

"The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis", said Andrew Kenningham, chief global economist at Capital Economics.

On Friday, Erdogan spoke by telephone with Russian President Vladimir Putin.

Turkish media covered the latest tensions between Ankara and Washington, with pro-government daily Sabah saying on its front page that "the currency attack" was no different from the attempted July 2016 coup.

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