It's time to take away Trump's tariff toys

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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 worldwide investors' confidence in the country. The Turkish lira plummeted against the dollar Friday, dropping by more than 13 percent.

"The situation of Turkey can not go on for much longer - I think they will have to intervene", Cristian Maggio, head of emerging markets strategy at TD Securities, adding that the intervention needed to be "drastic".

Countries like Turkey that are experiencing economic turmoil usually get sympathy from the rest of the world, said Torsten Sløk, chief worldwide economist for Deutsche Bank. That, analysts fear, is preventing the country from taking the necessary steps to put the economy on a more stable footing.

The lira, he noted on Twitter, "slides rapidly downward against our very strong Dollar!" "Our relations with Turkey are not good at this time!"

Trump's tariffs decision is another salvo in the growing dispute between the two North Atlantic Treaty Organisation allies.

This year, it lost more than 40 per cent. U.S. stocks were also rattled.

As he spoke, the lira fell further - adding to worries about the country's financial stability.

The lira tumbled about 10 percent on Friday to another record low as investors worry about Erdogan's unorthodox economic policies and USA sanctions. The selling extended to the United States, where stock benchmarks were down about half a percent. "Don't worry", Erdogan assured the crowd.

"If there is anyone who has dollars, euros or gold under their pillows, they should go exchange it for liras at our banks", he said Friday. Erdogan claims higher rates lead to higher inflation - the opposite of what standard economic theory says. Hard currency debt issued by Turkish banks suffered similar falls. Problems at banks could then spread to other sectors of the economy.

On Thursday, Erdogan said "If they have their dollar, we have the people, we have Allah".

His speech was quickly lampooned on social media, however.

We will see about that, expect Turkey to align with Washington.

Image Turkish President Recep Tayyip Erdogan in Bayburt
Tayyip Erdogan called on Turks to convert currency and gold into

The moves followed a series of actions the administration has taken in recent weeks to step up economic pressure on President Recep Tayyip Erdogan of Turkey to release US evangelical pastor Andrew Brunson, who has been detained in Turkey on espionage charges since October 2016.

Brunson, an evangelical Presbyterian pastor from North Carolina, was jailed for allegedly supporting a group that Ankara blames for an attempted coup in 2016.

"The announcement today of the tariffs on steel and aluminum in Turkey continues to further escalate a growing diplomatic crisis between Turkey and the United States". Aluminum will now be 20% and Steel 50%.

The White house said he had authorised the move under Section 232 of USA trade law, which allows for tariffs on national security grounds. A Republican ally of the president, Sen.

"I have always believed the case against #PastorBrunson was a sham".

"(Section 232 is) being employed more in a punitive sense rather than protecting a USA industry for the sake of national security", said Dan Mahaffee, senior vice president and director of policy at the Center for the Study of the Presidency and Congress.

Mr. Trump raised tariffs on Turkish steel imports to 50% and aluminum to 20%.

And the U.S. Air Force has used Incirlik Air Base in southern Turkey for years, even though a number of people in Turkey have pressed to have the U.S. forces expelled. The U.S. has fallen from Turkey's main steel buyer to No. 3. In aluminum, it's 31st, a tiny player.

The US was one of the top destination for Turkish steel exports in 2017, worth $1.1 billion.

High level meetings in Washington between USA and Turkish officials over a detained American pastor ended this week without an apparent resolution.

"Nevertheless, we implore President Trump to return to the negotiating table - this can and should be resolved through dialogue and cooperation". This article is strictly for informational purposes only. Shares of European lenders also dropped, hit by concern about their Turkish exposure.