Turkey braces for hard times amid currency crisis, United States spat

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On Wednesday, Turkey doubled tariffs on some imports from the USA - such as passenger cars, alcohol and tobacco - in what it said was retaliation for "deliberate attacks" on its economy.

The lira had rebounded about 8 percent on Tuesday on news of a planned conference call on Thursday in which the finance minister will seek to reassure global investors.

In June, credit rating agency Moody's said it would place Turkey's credit rating on review for a downgrade, citing the uncertainty around the future direction of its macroeconomic policies.

Turkish President Tayyip Erdogan signed a decree Wednesday to raise tariffs on USA imports including cars, alcohol and tobacco.

In response to the move, the Turkish president called on citizens to support the lira and boycott United States electronic products, describing the sanctions as an economic war, and threatening to give up using the USA dollar in trade with other countries.

"They are squeezing lira liquidity out of the system now and pushing interest rates higher", said Cristian Maggio, head of emerging markets strategy at TD Securities.

The Trump administration has levied tariffs against Istanbul over Turkish President Tayyip Erdogan's refusal to release Pastor Andrew Brunson after he had given the USA assurances that it would do so. Last week, the US also announced plans to double tariffs on Turkish steel and aluminum.

Erdogan said Turkey was facing an "economic attack" and a "bigger, deeper operation".

Turkey said Wednesday it is increasing tariffs on some USA products like cars, alcohol, and coal - a move that is unlikely to have much economic impact but highlights the deteriorating relations with the U.S.in a feud that has already helped trigger a currency crisis.

Tensions between the two North Atlantic Treaty Organisation allies have been strained amid Turkey's detention of American pastor Andrew Brunson.

Following the release of new tariffs on American products Wednesday, Turkish presidential spokesman İbrahim Kalın expressed hope that the two nations would resolve their issues, but insisted that Washington must stop petitioning for Brunson's release.

Turkey sought to face down the U.S. and currency traders as its president, Recep Tayyip Erdoğan, reportedly received support from the German chancellor, Angela Merkel.

Trump has repeatedly asked for Brunson's release, while Ankara said the decision was up to the court. An upper court had yet to rule on the appeal, his lawyer told Reuters.

Turkish President Recep Tayyip Erdogan has repeatedly described the dispute with the United States with as an "economic war" that Ankara will win.

Ferit Temur, an Ankara-based policy analyst on Russian Federation and Eurasia, also said Erdogan's speech demanding the USA abandon its hostile policy towards Turkey and threatening to form new alliances with the East was "a routine, weak political act". "We have other partners and alternative markets", said Turkish Trade Minister Ruhsar Pekcan.

Andrew Brunson, a 50-year-old evangelical Christian pastor from Black Mountain, served the people of western Turkey for more than 20 years.

Although the Turkish lira recovered modestly today, President Recep Tayyip Erdogan announced today a boycott of America's iPhone manufactured by Apple and other unspecified electronic products.