Trump doubles tariffs on Turkey, stoking jitters

Air Force Boeing KC-135R Stratotanker as it touches down on the flight line at the Incirlik Air Base in Turkey

Donald Trump has today announced massive increases to tariffs against Turkey as its currency the lira continues to plummet.

Compounding the lira's agony, President Donald Trump said he had doubled steel and aluminium tariffs on Turkey, noting that relations between the North Atlantic Treaty Organisation allies were "not very good". "Aluminum will now be 20% and Steel 50%". The currency's slide deepened early Friday, after the Financial Times reported that the eurozone's chief financial watchdog was concerned about how some of Europe's biggest lenders would be affected by a crisis in Turkey.

Since then, its relationship with Turkey, the sixth largest steel importer to the United States, has deteriorated, prompting Ankara to send a delegation this week to Washington to meet with both the State and Treasury Departments.

Trump tweeted on Friday that he would be doubling existing tariffs on steel and aluminum imports from Turkey.

President Tayyip Erdogan told Turks on Friday to exchange gold and dollars into lira as the country's currency plunged as much as 14 percent on worries about his influence over monetary policy and worsening relations with the United States.

Erdogan appealed to Turks to exchange dollars and gold for Turkish lira to support the plunging currency.

Turkey's escalating tensions with the USA have exposed long-standing domestic economic problems under Erdogan's stewardship -and the result has been a reckoning in financial markets, particular the Turkish currency.

The penalties also bar any USA transactions with the two men.

One of the triggers of the turmoil has been a standoff with the US over detained American pastor Andrew Brunson.

On Friday, they also had to also factor in Turkey's economic crisis. His comments on interest rates - and his recent appointment of his son-in-law as finance minister - have heightened perceptions that the central bank is not independent.

Paul Greer at Fidelity International said dramatic interventions were now needed as Turkey faced a "downward spiral" of investor confidence.

The lira was trading at 6.47 to the dollar at 1900 GMT, a loss on the day of 16.6 percent.

Ankara is under pressure to adopt orthodox steps to protect the lira by aggressively increasing interest rates to rein in double-digit inflation, a move Erdogan has publicly opposed. The Turkish currency shed about 17% of its value in a single day.

Without naming countries, Erdogan said supporters of a failed military coup two years ago, which Ankara says was organized by a US -based Muslim cleric, were attacking Turkey in new ways since his re-election two months ago.

Maizel recommends that investors stick with dollar-denominated issues, due to the volatility of emerging market currencies, such as the Turkish lira.

The Lira touched a record low of 5.44 against the Dollar, weakening some 2.5 percent from Wednesday's close.

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. "Repeated efforts to communicate to the United States administration that none of the stated criteria driving America's tariffs are applicable to Turkey have thus far proven fruitless", he said.