President Recep Tayyip Erdogan said Turkey will boycott electronic products from the United States, retaliating in a dispute with Washington that has contributed to a Turkish currency crisis. While Turkey's central bank has raised lending rates by 500 basis points this year to 17.75 per cent, it hasn't acted since the latest turmoil began with USA sanctions on the interior and justice ministers on August 1.
Erdogan vowed to substitute foreign imports with domestically produced goods.
Turkish President Tayyip Erdogan attends a news conference in Ankara, Turkey, Aug. 14, 2018. "We will implement these", he said. "In our own country we have Vestel", said Erdogan.
It was unclear whether Erdogan was referring to a trade war, or whether he was making a statement about military preparedness.
The United States and Turkey also have diverging interests over Syria, which is enmeshed in a protracted civil war.
That in turn is all too likely to result in real contagion to the rest of the emerging market economies, which could come back to adversely impact the USA economic recovery.
Turkey's Erdogan vows U.S. boycott, but diplomats resume talks
Brunson and his supporters have firmly denied the charges. "If they have the iPhone, there is Samsung elsewhere". He did not say when the boycott would start or how it would be enforced.
In an effort to defend the lira, Turkey's central bank tightened its rules on currency swaps and other foreign exchange transactions, limiting banks' ability to supply lira to foreign financial companies.
"On the one hand you are a strategic ally and on the other you shoot [the country] in the foot".
Turkey announced Wednesday that it is increasing tariffs on imports of certain USA products as a court denied an American pastor's appeal to be released from house arrest - both moves likely to escalate a feud with the United States that has helped trigger a currency crisis. The more diplomatic line than Trump's, calling for his "immediate release", was not meant to signal a change in policy, Nauert said Tuesday.
Visitors to Turkey have flocked to its high-end shops to treat themselves to bargain luxury goods, their purchasing power buoyed by a currency crisis as the country's lira sank to a record low beyond 7 per dollar. Erdogan has been fighting the Turkish Central Bank for years, at great risk, against high interest rates, while his desire to create an Islamic class of entrepreneurs has distorted public tenders.
Sterling reached a 13-1/2 month low versus the dollar despite data showing Britain's inflation rate picked up in July for the first time this year.
The first vulnerability to which the International Monetary Fund draws attention is the large amount of Turkey's debt that is US dollar-denominated and that is subject to valuation risk.
Jurgen Odenius, economic counsellor at PGIM Fixed Income, said: "The root cause of the crisis lies in a leverage-financed domestic demand boom that increased the external financing requirement of Turkey's corporations, banks, and government ..."
The escalating feud between the longtime North Atlantic Treaty Organisation allies is playing out against a backdrop of economic tumult in Turkey, which has seen steep drops in the country's currency, the lira.