Turkey says goodbye. Washington and Ankara unleash a trade war
Turkey increases trade duties on goods manufactured in America – cars, alcohol, food, cosmetics, and threatens to impose a ban on electronics from the United States. In the States, the actions of the Turkish authorities have not yet been noticed.
Between Washington and Ankara a real trade war is unleashed: the US raised duties on steel and aluminum from Turkey. Turkey in response introduces additional duties on American cars, tobacco products, alcohol, fruits. In addition, Republic President Recep Tayyip Erdogan threatens to ban American electronics. Against the backdrop of these events, the Turkish lira is rapidly depreciating.
How Ankara quarreled with Washington
Cooling relations between Turkey and the US began last week, when US President Donald Trump announced a two-fold increase in duties on Turkish steel and aluminum. “I just authorized an increase in tariffs for steel and aluminum from Turkey. At this time, their currency, the Turkish lira, is rapidly becoming cheaper to our very strong dollar! Now the duty on aluminum will be 20%, on steel – 50%, “wrote the American leader in his Twitter microblogging, adding that the relationship with Ankara” is not very good “.
In fact, the increase in duties on metals, and not only Turkish, the States are engaged in almost six months. The increase in tariffs for imports from a number of countries (the European Union, Mexico, Canada, Turkey, China) became aluminum and Washington announced in March. In June they took effect. The only difference is that duties for Turkey are twice as large as for other countries.
Recep Tayyip Erdogan reacted emotionally to the actions of the United States: “On the one hand, you are talking about a strategic alliance, on the other, you are beating in the back of your partner.” According to him, Ankara is not going to give up.
“In recent years, our partnership has been marked by disagreements. If the US does not respect the sovereignty of Turkey and does not prove that they understand the dangers threatening our country, then our partnership may be in jeopardy, “Erdogan’s article in The New York Times reads.
Erdogan believes that the US wants to weaken the Turkish economy, which “is one of the strongest in the world” (17th in terms of GDP).
In turn, the official representative of the Turkish Foreign Ministry Hami Aksoy said that the US actions are contrary to the rules of the World Trade Organization (WTO). “We can not agree on President Donald Trump’s decision to impose additional duties on the export of steel and aluminum to the norms of the World Trade Organization. The US should know that they will not be able to achieve results with such sanctions, “the politician said.
In response to Washington’s actions, Turkey increased duties from 20% to 140% on a number of goods manufactured in America – alcohol, cosmetics, cars, fruits. Moreover, Erdogan allowed the introduction of a ban on the import of electronics from the US – this decision will express “a firm political position,” the president believes. “Preservation of production is unacceptable. It is necessary to produce and export more, “- quotes the Turkish leader Reuters.
The sharpening of relations between Ankara and Washington occurred on August 1, when the US Treasury imposed sanctions against Turkish Foreign Minister Suleiman Soylu and Justice Minister Abdulhamit Gul. The reason for the sanctions was US citizen, pastor Andrew Brunson, whom the Turkish authorities accused of complicity in terrorism and which Ankara does not release to the States.
Devaluation for a departure from democracy
Turkey has not noticed a response from Turkey directed against American producers. On the contrary, at an increase in duties on steel and aluminum, the States earned an additional $ 1.4 billion, the US Congress reported recently. And before the end of the year, Washington is counting on a profit of 7.5 billion dollars (at the expense of duties for the countries of the European Union, Canada and Mexico).
The American currency is steadily strengthening. What can not be said about the Turkish. After the financial crisis, the Turkish prosecutor’s office launched an official investigation – the actions will be directed to the relations of individuals and media, which may pose a threat to the economic security of the republic. The Ministry of Internal Affairs deals with 346 accounts that are suspected of “provoking the growth of the exchange rate.”
In addition, Erdogan said, Turkey intends to abandon the use of the dollar in the calculations with its allies – Russia, China, Iran and Ukraine. “If the countries of Europe also want to get rid of the dollar, then Ankara is ready to go and with them for similar calculations,” the Turkish leader promised.
The Turkish leader also called on the population to exchange dollars and euros for the national currency.
According to the economic adviser of the White House, Kevin Hasset, the Turkish lira depreciates due to a departure from democracy. “When a country loses touch with liberal democracy, then you do not know exactly what will happen to the economy further,” Hasset said on MSNBC. He noted that the steel to which Washington increased duties is not “a large part” of the Turkish economy.