Trump Increases Tariffs On Turkey: Lira Plunges 18%, Global Stock Spillover

The Turkish Lira collapsed as much as 18% as Trump escalated his feud with Turkey over a detained US pastor.

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

Turkey ranked number six in 2017 as a supplier of steel to the U.S., and number 11 in aluminum, according to the Commerce Department.

Trump Turkey Flashback Timeline

May 16, 2017: Erdogan's bodyguards beat up US protesters

Sep 27, 2017: Trump says US & Turkey are "close as we've ever been"

Feb 14, 2018: US drops charges against Erdogan's bodyguards

Apr 17, 2018: Trump congratulates Erdogan

Jun 26, 2018: Trump congratulates Erdogan again https://t.co/Inepa2jrEv
— Keith Boykin (@keithboykin) August 10, 2018

Feud Over Detained US Pastor Escalates

Today, the WSJ reports Trump Vows to Double Metals Tariffs on Turkey as Dispute Escalates Over Detained American

President Trump said Friday he would double steel and aluminum tariffs on Turkey, more than a week after he imposed sanctions against two top Turkish officials over the country’s refusal to free an American pastor held for nearly two years.

The Turkish lira fell nearly 14% against the dollar on Friday, amid concerns about Turkey’s foreign debts. Turkey’s external debt to gross domestic product is above 50%, one of the highest among developing economies.

The Treasury Department last week moved to prevent Americans from doing business with Turkey’s ministers of justice and interior, both of whom the U.S. accused of “serious human rights abuses” for their roles in detaining Pastor Andrew Brunson, a 50-year-old North Carolina native who was arrested three months after a failed July 2016 military coup.

Background

The US wants Turkey to release protestant minister Andrew Brunson who is charged with "acting on behalf of two groups deemed by Turkey to be terrorists." Brunson has been under house arrest in Turkey since October 7, 2016.

Erdogan demands the US return Turkish cleric Fethullah Gülen who is in exile in the US. Turkey accuses Gülen of terrorism. Charges of terrorism are ridiculous. Erdogan refuses to give the US evidence.

In a nutshell, Erdogan arrested Brunson hoping to force the US to release Gulen in exchange.

For further background discussion, please see Trump Sanctions NATO ALLY Turkey, Lira Dives 2.1% to Record Low.

Turkey Blames US for Crisis