Turkey ranked number six in 2017 as a supplier of steel to the U.S., and number 11 in aluminum, according to the Commerce Department.
Trump Turkey Flashback Timeline
Feud Over Detained US Pastor Escalates
President Trump said Friday he would double steel and aluminum tariffs on Turkey, more than a week after he imposed sanctions against two top Turkish officials over the country’s refusal to free an American pastor held for nearly two years.
The Turkish lira fell nearly 14% against the dollar on Friday, amid concerns about Turkey’s foreign debts. Turkey’s external debt to gross domestic product is above 50%, one of the highest among developing economies.
The Treasury Department last week moved to prevent Americans from doing business with Turkey’s ministers of justice and interior, both of whom the U.S. accused of “serious human rights abuses” for their roles in detaining Pastor Andrew Brunson, a 50-year-old North Carolina native who was arrested three months after a failed July 2016 military coup.
The US wants Turkey to release protestant minister Andrew Brunson who is charged with "acting on behalf of two groups deemed by Turkey to be terrorists." Brunson has been under house arrest in Turkey since October 7, 2016.
Erdogan demands the US return Turkish cleric Fethullah Gülen who is in exile in the US. Turkey accuses Gülen of terrorism. Charges of terrorism are ridiculous. Edrogan refuses to give the US evidence.
In a nutshell, Erdogan arrested Brunson hoping to force the US to release Gulen in exchange.
Turkey Blames US for Crisis
US Equities Hit
U.S stocks slid on Friday, with banks taking the biggest hit, as concerns over Turkey's economy and its deepening rift with the United States roiled stock markets around the world.
"The currency crisis is actually a banking crisis as Turkey owes so much money to so many different banks, that they risk a potential contagion," said David McKnight, adviser at David McKnight & Co in Puerto Rico.
"As long as Trump is going to be willy-nilly with tariffs, there's going to be a lot of uncertainty and markets thrive on certainty."
Turkish Lira Daily Chart
Turkish Lira Monthly Chart
Erdogan Dismisses Lira Fears, Says 'We Have Our God'
“There are various campaigns being carried out. Don’t heed them,” Erdogan said.
“Don’t forget, if they have their dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago and look at us now,” he said.
Turkey on Venezuela's Path
- Erdogan jailed political opponents
- Parliament effectively made Erdogan prime minister for life
- Erdogan took over the press
- Erdogan took over the courts
- Erdogan took over finance
- Erdogan about to take over the central bank
Venezuela did not hop straight into hyperinflation and Turkey likely won't either.
However, if Turkey remains on the same path, which seems highly likely, hyperinflation is the inevitable outcome.
Mike "Mish" Shedlock