Trump Vows to Double Metals Tariffs on Turkey--2nd Update

Date : 08/10/2018 @ 10:15AM
Source : Dow Jones News

Trump Vows to Double Metals Tariffs on Turkey--2nd Update

By Rebecca Ballhaus and Jacob M. Schlesinger 

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.

Mr. Trump in a tweet said the U.S. would impose aluminum tariffs of 20% and steel tariffs of 50% on Turkey.

"Our relations with Turkey are not good at this time!" he wrote on Twitter Friday morning.

Turkey President Recep Tayyip Erdogan struck a defiant tone Friday, saying the country would prevail in what he called an "economic war."

"Hopefully we will overcome this disaster and we will also successfully overcome this economic war," he said, according to Turkish television.

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.

Turkish officials have accused Mr. Brunson of aiding the group accused of orchestrating the coup and another Kurdish separatist movement, charges that the American pastor and U.S. officials have denied.

Mr. Brunson's allies accused Turkey of holding the pastor as a political bargaining chip, and his case has become a cause célèbre among evangelical Christian groups.

During high-level talks in Washington this week, U.S. and Turkish officials were unable to break through the impasse that has pushed Turkey's economy into turmoil, U.S. officials said. Turkey's currency has plunged amid the crisis amid fears that the U.S. could take tougher steps before the standoff is resolved.

Mr. Brunson's fate has become the most polarizing issue dividing the U.S. and Turkey, two North Atlantic Treaty Organization members that have repeatedly clashed over Washington's policy in the Middle East.

Mr. Trump's tweeted announcement came as Turkish Finance Minister Berat Albayrak, Mr. Erdogan's son-in-law, was unveiling a rush "new economic model" to try to assuage the markets.

Mr. Trump's action also suggests a new front in his increasingly aggressive use of presidential trade powers as an economic and diplomatic weapon, applying escalating tariffs to increase pressure on a trading partner.

In the tweet, Mr. Trump suggested that the higher tariffs may be an attempt to offset the weakening Turkish currency, which has the effect of making Turkish goods cheaper in the U.S. market.

Prior U.S. administrations have tried to keep trade and foreign exchange policies separate. If officials felt another country's weaker currency was damaging to the U.S., they might intervene in currency markets, but would not use tariffs to offset the impact.

But Mr. Trump has signaled a shift in that longstanding approach a few times in his presidency. Trump aides suggested that one reason they decided to increase planned tariffs on $200 billion in Chinese imports from 10% to 25% was because they felt Beijing was trying to weaken the yuan to offset their tariffs.

The original tariffs on Turkish steel and aluminum were part of a broader imposition of import taxes on those metals imposed by the Trump administration earlier this year in an effort to protect the U.S. industries in the name of national security.

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.

--Mike Bird and Jon Sindreu contributed to this article.

Write to Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com and Jacob M. Schlesinger at jacob.schlesinger@wsj.com

 

(END) Dow Jones Newswires

August 10, 2018 10:00 ET (14:00 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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