Erdogan warns Turkey's partnership with United States 'in jeopardy'

Hannah Rogers
August 13, 2018

President Tayyip Erdogan told Turks on Friday to exchange gold and dollars into lira, with the country's currency in free fall after President Donald Trump turned the screws on Ankara by doubling tariffs on metals imports.

Relations between the two countries deteriorated in the wake of US President Donald Trump's decision to increase tariffs on Turkish aluminum and steel to 20% and 50% respectively.

Turkey on Friday "implored" U.S. President Donald Trump to return to the negotiating table on tariffs, saying the trade rift between the North Atlantic Treaty Organisation allies should be resolved through dialogue.

Last week, the United States imposed sanctions on Turkey's justice minister and interior minister for not releasing pastor Andrew Brunson. "This is Turkey", he said.

He went on to say that unilateral actions against Turkey by the U.S. will "only serve to undermine American interests and security" and said that Washington must "give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives".

Erdogan said during an address to supporters: "Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks".

President Trump's sanctions saw the Turkish lira plummet to a risky low, causing a financial crisis that has also threatened to destroy Europe after it triggered concerns with banks in Spain, Italy and France. He wrote and Washington's unilateral actions against Turkey undermine American interests and force Ankara to search for new allies.

Turkey's president yesterday blamed the country's economic downturn on the United States and other nations that he claims are waging "war" against his country.

The lira, which has lost a third of its value this year, fell on his comments and was trading at around 6.05 to the dollar after he spoke, almost 9 percent weaker on the day.

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Brunson, an evangelical Presbyterian from North Carolina, was jailed for allegedly supporting the group that Turkey blames for the failed coup and was moved from prison to house arrest in July.

The tensions with Washington have, for investors, underscored Turkey's authoritarian trajectory under Erdogan.

Brunson is now on trial in Turkey for espionage and terror-related charges linked to a failed coup attempt in the country two years ago.

"The US and Turkey are breaking up".

"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. But Erdogan urged Turks not to be panicked by the currency crisis, saying: "If they have the dollar, we have Allah". It is host to a critical part of the Western alliance's missile defence system against Iran.

The Russian ruble this week plummeted to its lowest level against the dollar since 2016 as the United States said it was imposing more sanctions on Moscow over a chemical attack in the UK earlier this year.

Iran has also suffered a major tumbling of its currency this year partly over the reimposition of United States sanctions after Trump abandoned the 2015 nuclear deal.

Turkey has also been hit by U.S. sanctions on Iran, given that half of Turkey's oil imports come from Iran.

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