President Donald Trump announced Friday that he plans to double steel and aluminum tariffs on Turkey - prompting the lira to plunge 20 percent - amid heightened tensions between the two North Atlantic Treaty Organisation allies.
These tensions and tariffs indicate a deterioration of the U.S.
Also on Friday, relations between the United States and Turkey have worsened over the fundamentalist Muslim-majority country's detention of American pastor Andrew Brunson, who was arrested by authorities during a post-military coup attempt in 2016. At the beginning of August, the U.S. Treasury Department sanctioned Turkey's ministers of Justice and Interior because of Brunson's detainment.
Mr Trump intensified his spat with Turkey by imposing the higher tariffs, putting unprecedented economic pressure on a North Atlantic Treaty Organisation ally and deepening turmoil in Turkish financial markets.
Adding to Turkey's problems, the Trump administration doubled tariffs on the country's steel products on Friday.More news: Unemployment rate drops to four-decade low in July
"I have just authorised a doubling of Tariffs on Steel and Aluminium with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar!"
The lira's decline caps a week of political news that's unnerved investors, as the U.S. ramped up sanctions on Turkey and Russian Federation and as the United Kingdom fretted over a so-called no-deal Brexit.
It said it would support steel and aluminium exporters on all worldwide platforms, and the United States remained an important trade partner.
Trump's action on Friday indicates he is willing to use his presidential powers as an economic and diplomatic weapon, even against allies, the Wall Street Journal reported.
"Turkey expects other member countries to abide by global rules", the country's trade ministry said in a statement.
"There is zero credibility in the Central Bank of Turkey and zero credibility in Turkish policy making".More news: Donald Trump Responds To N-Word Accusations In Typically Grown-Up Manner
"I'm not aware of any prior administration using tariffs in this way, and there's a very simple reason: because they're an incredibly blunt instrument that often can have blowback on American workers and consumers as we've seen in the China context", said Ned Price, a former Central Intelligence Agency officer who also served as a National Security Council spokesman during the Obama administration. He claims higher rates lead to higher inflation - the opposite of what standard economic theory says.
Turkey's President Recep Tayyip Erdogan in Rize spoke of Turkey's plans to trade in local currencies with some countries.
"If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks", he said during an address to supporters.
President Recep Tayyip Erdogan, who had remained unusually silent until now as the lira crisis mounted, urged Turks to take matters into their own hands.More news: Taliban attack on Afghan city of Ghazni enters third day
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