Turkey's floundering economy exacerbated by Trump tariffs

Turkey fails to resolve disputes with US

Turkish lira tumbles to fresh low | Business

Turkish President Recep Tayyip Erdogan is appealing for calm as the country's currency plunges, urging people to change foreign money into local lira.

Friday morning, President Trump tweeted about the situation with Turkey, announcing further tariffs and noting that relations between the USA and Turkey are "not good". "Aluminum will now be 20% and Steel 50%", President Donald Trump tweeted". "Our relations with Turkey are not good at this time!" he noted.

But Israel released that woman last month, and pastor Andrew Brunson of North Carolina remains in a Turkish prison.

Turkish Deputy Foreign Minister Sedat Onal (2nd-L) leaves after a meeting with U.S. Deputy Secretary of State John Sullivan at State Department in Washington, U.S., August 8, 2018, without reaching an agreement.

Erdogan framed Turkey's currency crisis as a "national battle" against economic enemies, namely the USA, saying "if they have their dollar, we have the people, we have Allah".

He added: "Relations with countries who behave like this have reached a point beyond salvaging".

The lack of central-bank action to support the currency is also spooking investors and Erdogan's previous comment that interest rates are the "mother and father of all evil" hasn't helped.

"We will not lose the economic war", state-run TRT Haber TV quoted Erdogan as saying, according to Agence France-Presse.

As the crisis swelled he told his supporters not to worry.

"This will be my people's response to those who have waged an economic war against us", he said.

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"The dollar can not block our path".

Wall Street couldn't avoid the bloodbath on Friday triggered by a collapse of the Turkish lira amid escalating diplomatic tensions between the USA and Turkey.

The lira fell further as Erdogan spoke.

'However, I say it once again from here.

Brunson's charges include spying for the PKK, listed as a terrorist group by both the US and Turkey, and the Fetullah Terrorist Organization (FETO), the group behind the defeated coup attempt in Turkey of July 2016. The central bank, officially independent, appears to have heeded Erdogan and has not raised rates when many - including the International Monetary Fund - said it should have.

Meanwhile, Turkish Treasury and Finance Minister Berat Albayrak is expected to present a new economic development doctrine for the country on Friday.

As investors piled into "safe" bonds, German yields hit three-week lows and yields on USA 10-year Treasuries fell to 2.8913 percent.

In a statement, the White House said the president had authorized the preparation of documents to raise tariffs, citing national security concerns. As the currency drops, Turkish companies and households with debt in foreign currencies see their debts expand.

Erdogan, a self-described "enemy of interest rates", wants banks to lend cheap credit to fuel growth, but investors fear the economy is overheating and could be due for a hard landing. Earlier, it had crashed some 12 percent through the 6.00 level for the first time in history, trading at one point at more than 6.20 lira per dollar.

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