Turkish Currency Plunges, Trump Doubles Metal Tariffs

Investors have been losing confidence in the increasingly authoritarian direction of Islamist Turkish president Erdogan.

The Turkish Lira plunged 15% to a new record low, following a Tweet from US President Donald Trump announcing that he would double metal tariffs on Turkey:

“I have just authorized 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!”

The Turkish Lira had already been collapsing earlier in the day, and is down dramatically for the year.

Below, you can see how the value of the Turkish Lira has fallen next to the US dollar:

Source – CNBC

The US has demanded that Turkey return an imprisoned US pastor. Turkey has refused, leading to a further breakdown in relations.

Erdogan has also moved Turkey away from secularism to a more Islamist direction, while amassing quasi-dictatorial powers.

As the currency plunged, Erdogan made a speech that only further reduced confidence:

“Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks. This is a domestic and national struggle,” said Erdogan. “We are facing economic attacks today, and we need to defend our country. The economic attack against us now is the same as the coup attempt against us. I’m urging our country to increase outputs, to increase exports.”

The real issue of course is Erdogan’s increasingly irrational actions, and his willingness to intervene in monetary policy, all of which is causing investment to flee Turkey.

An Exchange Traded Fund of Turkish stocks fell 14.9%.

Spencer Fernando

Photo – YouTube