Higher US tariffs increase pressure on Turkish economy

The Turkish government has promised to announce a “new economic model” today amid fears that the International Monetary Fund would have to be called

Trump vows to double steel and aluminum tariffs on Turkey

Erdogan had on Saturday described interest rates as a "tool of exploitation", in remarks that may not be warmly welcomed by the markets.

The currency's drop - 41 per cent so far this year - is a gauge of fear over a country coming to terms with years of high debt, global concern over Erdogan's push to amass power, and a souring in relations with allies like the US.

Erdogan repeated his call for Turks to sell dollars and buy lira to shore up the currency, while telling business owners not to stock up on dollars.

The case of Andrew Brunson, an evangelical Christian, is one of a series of disputes that lies at the heart of deteriorating ties between the two North Atlantic Treaty Organisation allies.

President Donald Trump doubled U.S. tariffs on Turkish steel and aluminium, saying "US relations with Turkey are not good at this time".

He said: "It is wrong to dare bring Turkey to its knees through threats over a pastor". Erdogan asked Washington. "What happened to you now?"

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 Trump administration threatened to impose additional sanctions on Turkey if it did not meet the deadline, Erdogan said.

Erdogan downplayed the currency crisis in a speech on Friday, advising Turks not to be anxious over exchange rate fluctuations.

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The total number of hours worked in July expanded 1.3 percent, a slightly slower pace than the June reading of 1.4 per cent. The report said the main cause of the drop was due to the fact fewer young people were looking for work.

Turning to the economic effects of the diplomatic row, Mr Erdogan said: "If they have the dollar, we have Allah".

"During this period, Turkey has set records in its exports, production and employment", Erdogan said.

"We know very well that the issue is not the dollar, the euro or gold".

Turkey's woes have been aggravated by investor worries about the economic policies of Mr Erdogan, who won a new term in office in June with sweeping new powers.

Ankara had already taken measures to respond and would continue doing so, he added. On Friday, The New York Times published an article by Erdogan himself.

"Unless the United States starts respecting Turkey's sovereignty and proves that it understands the dangers that our nation faces, our partnership could be in jeopardy".

Turkey says doubled tariffs on Turkish steel and aluminium announced by US President Donald Trump are against the rules of the World Trade Organisation (WTO). He wrote and Washington's unilateral actions against Turkey undermine American interests and force Ankara to search for new allies.

Iran has also suffered from a major tumbling of its currency this year partly over reimposition of USA sanctions after Trump abandoned a 2015 nuclear deal. Brunson was among many foreign nationals detained by Turkish President Erdogan in the wake of a failed 2016 coup attempt. Even if Washington and Ankara can resolve their immediate problems - such as the recent arrest of USA citizens in Turkey - the numerous, and multiplying, issues on which Turkey and the United States now disagree could be their relationship's undoing.

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