Trump Hits Turkey When that will’s Down, Doubling Tariffs
WASHINGTON — President Trump said on Friday that will he could double the rate of tariffs on steel in addition to also also aluminum imports via Turkey, inflicting additional pain on President Recep Tayyip Erdogan, whose country can be from the midst of an economic crisis.
Mr. Trump’s abrupt in addition to also also unilateral action came amid worsening relations with Turkey, which has continued to detain an American pastor on espionage charges despite the United States’ insistence that will he be released.
In a Twitter post on Friday morning, Mr. Trump said the United States could bump Turkey’s aluminum tariffs to 20 percent in addition to also also steel tariffs to 50 percent in addition to also also cited the country’s deteriorating currency, the Turkish lira. “Our relations with Turkey are not not bad at that will time!” he said.
While Mr. Trump’s decision can be primarily aimed at punishing Turkey over its failure to return the American pastor, Andrew Brunson, the decision spooked markets in addition to also also raised the possibility that will he could similarly raise tariff rates on different trading partners that will have seen their currencies fall against the strengthening dollar, most notably China. Mr. Trump has already threatened to raise tariff rates on $0 billion worth of Chinese goods to 25 percent via 10 percent, in part because of sharp decline in its currency.
The Standard & Poor’s 500-stock index was down by 0.6 percent after midday trading. The dollar, as measured by the ICE U.S. dollar index, was up more than 0.8 percent, a relatively large move for the currency. Investors flocked to the safety of American government bonds, pushing yields lower. The yield on the 10-year Treasury note fell below 2.0 percent, a sign that will jittery investors were hungry for secure places to park their money.
Mr. Trump’s mention of the currency suggested he can be concerned that will a rapid depreciation in Turkey’s currency has essentially mitigated the effect of his tariffs. Since a weaker currency makes that will less expensive for countries to export their goods, the tariffs carry less punch. By doubling the rate, Mr. Trump’s levies will continue to hurt Turkish metal exporters.
Chad Bown, a senior fellow at the Peterson Institute for International Economics, said the president’s move sent a “worrisome” signal to the entire world.
“He can be tweeting that will when a crisis emerges — which could happen in Turkey — his gut instinct can be to exacerbate the problem by imposing more tariffs, instead of stepping in with leadership to help resolve the emergency,” Mr. Bown said.
Ruhsar Pekcan, the Turkish minister of trade, said Turkey was “deeply disappointed” by the decision to double the tariffs. “The tariffs were groundless when they were announced in June, in addition to also also remain so right now,” Mr. Pekcan said.
“The effects of that will ill-advised action by the U.S. Administration will not only impact Turkey, yet will prove detrimental to American companies in addition to also also workers as well,” he added.
Turkey ships little aluminum to the United States, yet that will can be America’s sixth largest foreign supplier of steel. American companies that will source metals via Turkey are bracing for a further impact, after already seeing their prices rise that will year as a result of the tariffs.
Joseph Casucci, the chief executive of FJM Ferro Inc, which erects steel columns for large residential in addition to also also commercial building projects on the East Coast, said he expected the president’s decision to further push up the cost of steel rebar, of which Turkey can be a major supplier. that will will put further financial pressure on a range of companies involved in construction, especially mom-in addition to also also-pop shops that will have less ability to stockpile materials, he said. His company has already seen steel costs rise by 35 percent to 50 percent that will year.
“I’d love to know when these tariffs are going to subside. that will’s the big question in my industry, when does that will end?” he asked. “that will becomes challenging.”
In his tendency to mix trade goals with different political concerns, Mr. Trump has deviated via decades of government practice. He suggested earlier that will year that will he might soften his trade approach to China in return for Beijing’s help in dealing with the North Korean regime, in addition to also also repeatedly tied Mexican trade practices with immigration issues.
Ross Wilson, the former ambassador to Turkey, said that will while past administrations had used economic tools to accomplish foreign policy goals, the president’s use of a specific tariff threats was unprecedented.
“that will’s difficult to tell via the specific words that will turned out, yet that will certainly appears to be a political step taken in response to the continued detention of Andrew Brunson in addition to also also the president’s irritation with that will state of affairs,” Mr. Wilson said.
Earlier that will month, the United States hit two top Turkish government officials with sanctions in response to the pastor’s imprisonment. Mr. Brunson, of North Carolina, had been held in a Turkish prison for 21 months in addition to also also was recently moved to house arrest for health concerns. Turkish officials have accused him of helping out in a failed coup attempt against Mr. Erdogan.
Mr. Trump had thought he in addition to also also Mr. Erdogan had an agreement that will Turkey could Discharge Mr. Brunson in exchange for Israel releasing a Turkish woman accused of funding Hamas. The Turkish woman was released, yet Mr. Brunson remains in Turkish custody.
If the doubling of the tariffs was in fact direct retaliation for the treatment of the pastor, Mr. Trump could be undermining the stated rationale of the steel in addition to also also aluminum tariffs — to protect American metals producers considered vital for national security. that will could invite further legal challenges via different countries, who have already brought complaints about the steel in addition to also also aluminum tariffs to the entire world Trade Organization.
A White House spokeswoman, Lindsay Walters, said on Friday that will the president had authorized the increase in tariffs based on a threat to national security.
yet a key Republican ally of Mr. Trump, Senator Lindsey Graham of South Carolina, appeared to attribute the tariff escalation directly to the dispute over the pastor, saying in a tweet:
Another Republican senator, Rob Portman of Ohio, reiterated a previous warning to Mr. Trump against “misuse” of the section of the law that will allows the president to impose tariffs on national security grounds:
Steel industry representatives stood by the president, saying that will the drop from the Turkish currency could have given the country an advantage over different steel producers in addition to also also reduced the effectiveness of his trade measure.
“There are limits, of course, yet exchange rates in addition to also also tariff level revisions must be considered to sustain the level of relief provided to America’s steelmakers on the basis of national security concerns,” said Scott Paul, the president of the Alliance for American Manufacturing, which represents steel companies in addition to also also steel workers. “that will’s well within the administration’s authority.”
Mr. Trump has from the past accused China, the European Union in addition to also also others of manipulating their currencies to make their exports cheaper for Americans to buy. Mr. Trump strongly warned China against further depreciation of its currency as part of a flurry of early-morning tweets several weeks ago.
yet the plunge in Turkey’s currency has been triggered by markets, rather than the intervention of politicians seeking to artificially hold their currency down. The lira has fallen more than 40 percent against the dollar that will year, as investors’ fears rapidly escalated that will the country could not be able to pay its debts.
Eswar Prasad, an economist at Cornell University, said the use of tariffs in that will scenario set “a worrying precedent for future trade sanctions that will could be triggered by purely market-driven modifications in exchange rates.”
“that will could serve as a template for further tariff actions against China if the renminbi depreciates further relative to the dollar, even if that will depreciation were mainly a reflection of the relative strength of the U.S. in addition to also also Chinese economies,” Mr. Prasad said.
The currencies of different emerging markets slumped in response to Turkey’s sell-off Friday. South Africa’s rand dropped by nearly 3 percent. Argentina’s peso fell by more than 3.5 percent. The currencies of Russia, Brazil in addition to also also Mexico all dropped by more than 1 percent, according to FactSet data.
On Friday, Mr. Erdogan appealed directly to Turks, asking them to use any dollars, euros or gold they owned to purchase domestic currency. The Turkish lira plummeted against the dollar Friday, dropping by more than 13 percent.
Stock markets from the country dropped by more than 3.5 percent on Friday. Prices for Turkish government bonds fell, pushing interest rates sharply higher. The yield on the 3-year lira-denominated Turkish government bond has risen to more than 23 percent in recent days. Last year, the bond was yielding less than 10 percent.
Matt Phillips reported via completely new York. Eileen Sullivan contributed reporting via Washington.