President Donald Trump announced in a tweet that he would be increasing the rate of existing tariffs against Turkey, as the value of the Turkish lira plunges.
What did the tweet say?
Trump tweeted on Friday that he would be doubling existing tariffs on steel and aluminum imports from 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!
— Donald J. Trump (@realDonaldTrump) August 10, 2018
On March 1, Trump had announced global tariffs of 10 percent on all aluminum to the U.S. and 25 percent on all steel imports.
What’s happening to Turkey’s currency right now?
The Turkish unit of currency, the lira, has been dropping due both to the policies of Turkish President Recep Tayyip Erdogan and that country’s souring relationship with the United States. It has lost 40 percent of its value so far in 2018, and reached record lows following Trump’s tweet.
On Friday, Erdogan asked Turkish citizens to sell off their gold and dollars and exchange them for the lira, in an attempt to prop up the currency. Erdogan’s speech caused the value of the lira to drop even further.
This is what happened to the lira as Turkey’s President Recep Tayyip Erdogan urged his fellow countrymen to sell gold, euros and dollars in exchange for the lira. pic.twitter.com/ae0px3AhGd
— Financial Times (@FinancialTimes) August 10, 2018
Why is the White House hitting Turkey with tariffs?
The United States hit two high-ranking Turkish officials with sanctions after the Turkish government refused to release imprisoned Christian pastor Andrew Brunson.
Brunson was arrested in 2016 on charges that he had participated in a failed military coup against Erdogan, and had colluded with Kurdish militants. Brunson was moved from prison and placed under house arrest on July 25.
Brunson denies both charges and his supporters argue that these accusations were fabricated by the Turkish government.
On July 26, Trump announced that he would hit Turkey with “large sanctions” if it continued to hold Brunson, adding “This innocent man of faith should be released immediately!”
The United States will impose large sanctions on Turkey for their long time detainment of Pastor Andrew Brunson, a great Christian, family man and wonderful human being. He is suffering greatly. This innocent man of faith should be released immediately!
— Donald J. Trump (@realDonaldTrump) July 26, 2018
The New York Times suggested that Trump could also be trying to offset the effects of Turkey’s weakened currency on the existing tariffs. A weaker lira means that the taxes will be less impactful. As of Friday morning, the lira was worth roughly 15 cents.