US President Donald Trump has escalated his economic war on against Turkey and its president, Recep Tayyip Erdogan, to a new and more aggressive level. On Friday (August 10) he announced he was doubling tariffs on imported Turkish iron and steel and aluminium in a bid to throttle the Turkish economy and exacerbate its currency crisis.
He tweeted: I have just authorised a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!
This tweet, with its racist undertones and vindictive spirit, clarifies the nature of the American conspiracy against Muslim Turkey: It aims at wrecking the economy and sending it into recession in order to deprive Erdogan of his main achievement in government, which has enabled him to win every presidential and parliamentary election he has contested since 2002.
This amounts to an undeclared siege on Turkey, no less damaging than that imposed on Iran. The Lira plummeted by 10% on Friday, its biggest fall in a single day for two years, breaking below the psychologically important barrier of six to the dollar. The deterioration can be expected to continue following Trump’s tariff hike.
Erdogan responded by urging Turkish citizens to change any foreign currency saving they might have into liras. He called for a national struggle against the economic war waged against the country, which he vowed that Turkey would never lose. This might motivate some Turks to go to the banks and exchange their foreign currency for liras, as they did in response to a similar call three months ago, but the impact of this is likely to be limited. Turkish economists believe the most serious aspect of the crash of the lira is the prospect of debt-ridden Turkish companies being unable to repay their dollar or euro-denominated bank loans, borrowed during the property boom that Erdogan’s government oversaw. This could drive some of them into bankruptcy.
Trump wants to exact revenge against Erdogan because of his defiance of US policies and dictates in four main areas.
– His refusal to release the American pastor Andrew Brunson who was detained on suspicion of links with followers of the US-based preacher Abdullah Gulen, whom Erdogan accuses of masterminding the failed 2016 coup and wants the Americans to extradite.
– Erdogan’s decision to buy advanced Russian S-400 air defence missile systems as an alternative to the US-made Patriot.
– His opposition to the US’ relocation of its embassy to Jerusalem and recognition of Israel’s claim to the city as its capital, and his backing for the Hamas movement and condemnation of the siege imposed on the Gaza Strip.
– Erdogan’s declared opposition to the embargo against Iran and his refusal to abide by US sanctions against the country – in defence of Turkey’s interests and its roughly ten billion dollars worth of annual trade with Iran.
Trump’s financial extortion against Turkey will push it to hasten its rapprochement with both Russia and Iran. It is most unlikely that US pressure will prompt Erdogan to kneel at Trump’s feet, release the American pastor for nothing in return, or acquiesce to the blockade of Iran.
The Turkish economy, and not just the currency, is in for a tough ride for the foreseeable future. The country is being besieged by adversaries, and its allies Iran and Russia are also facing US sanctions.
This is a political war in economic guise declared by the US and its NATO allies against Turkey. The right response would be for Turkey to announce the suspension of its membership in that alliance, enter into new political and military partnerships with Russia, China, Iran and India, and act to quickly bring about a political solution in Syria that ends the war there.