Financial crisis rocks Turkey

Turkish turmoil Treasury and Finance Minister Berat Albayrak wipes his forehead as he talks during a conference in a bid to ease investors’ concerns about Istanbul’s economic policy. AP

ANKARA — A financial shockwave ripped through Turkey on Friday, when its currency nosedived on concerns about its economic policies and a dispute with the US, which President Donald Trump stoked further with a promise to double tariffs on the NATO ally.

The lira tumbled 14 percent in one day, to 6.51 per dollar, a massive move for a currency that will make the Turkish poorer and further erode international investors’ confidence in the country.

The currency’s drop — 41 percent so far this year — is a gauge of fear over a country coming to terms with years of high debt, international concern over President Recep Tayyip Erdogan’s push to amass power and a souring in relations with allies like the US.

The diplomatic dispute with the US was one of the triggers that turned market jitters into a full-blown rout this week.

Turkey has arrested an American pastor and put him on trial for espionage and terror-related charges linked to a failed coup attempt in the country two years ago. The US responded by slapping sanctions on Turkey and threatening more.

The sides held talks in Washington this week but failed to resolve the spat and Trump took advantage of Turkey’s turmoil on Friday to turn the screws on the country.

Trump tweeted that he had authorized the doubling of steel and aluminum tariffs “with respect to Turkey.”

Trump said the tariffs on aluminum imports would be increased to 20 percent and those on steel to 50 percent as the Turkish lira “slides rapidly downward against our very strong Dollar!”

“Our relations with Turkey are not good at this time!” he wrote.

Trump made the 50 percent steel tariff official with a presidential proclamation Friday evening.

The United States is the biggest destination for Turkish steel exports with 11 percent of the Turkish export volume. The lira fell further after Trump’s tweet.

Late Thursday and prior to Trump’s tweet, Erdogan said he would stand up to pressure from the United States.

“There are various campaigns being carried out. Don’t heed them,” Erdogan said Thursday.

“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,” Erdogan told supporters.

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