Turkish President Recep Tayyip Erdoğan said on Tuesday Turkey would boycott electronics from the United States, which has imposed sanctions and raised tariffs on Ankara in a dispute about the detention of American pastor Andrew Brunson.
The announcement came in his address to a symposium organized by the pro-Erdoğan Foundation for Political, Economic and Social Research (SETA) on the 17th anniversary of the establishment of the ruling Justice and Development Party (AKP).
“We will boycott America’s electronic products,” Erdoğan said, mentioning that Turkey would produce better than every product bought with foreign currency and export them. “They do not refrain from using the economy as a weapon against us [Turkey], as they [also] tried in the areas of diplomacy and the military, and efforts for social and political instability,” he added.
Erdoğan also said Turkey has been taking necessary measures regarding the economy, amid a slide in the lira exacerbated by the dispute with Washington, but it was important to maintain a firm political stance. Switching to foreign currency would mean giving in to the enemy, Erdoğan said.
Erdoğan spoke after hopes for a resolution to the diplomatic crisis with the United States were raised by a meeting between Serdar Kılıç, Turkey’s ambassador to Washington, and US President Donald Trump’s national security adviser, John Bolton, late on Monday.
Erdoğan slammed Trump, saying Turkey was under economic attack and that the campaign was part of a wider policy targeting countries from Russia to Europe, Iran to China.
Turkey raises tariffs on US-origin products
Turkey has increased tariffs on several US-origin products, including alcohol and tobacco products and cars, according to a new presidential decree published early Wednesday in the official gazette.
Under the decree, Turkey will raise tariffs to 100 percent on imports of the products. The new decree amends a presidential decree on July 11.
“Tax rates on imports of some products have been increased on a reciprocal basis against the US administration’s deliberate attacks on our economy,” Turkey’s Vice President Fuat Oktay said on Twitter.
Among the products are cars, rice, some alcohol, and tobacco products and some cosmetic products like sun creams.
Watchdog limits forex swap transactions
Turkey’s banking watchdog the Banking Regulation and Supervision Agency (BDDK) placed limits on swap transactions that banks can carry out in the latest move by Turkish authorities to defend the lira.
The watchdog placed a limit on the size of the transactions of trades in Turkish liras for dollars equal to 25 percent of a bank’s regulatory capital, down from 50 percent, according to a report by Cumhuriyet daily citing a statement. Banks may not engage in further trades until those limits have been achieved, it said.
Turkey’s embattled lira climbed 2,2 percent to 6,21 per dollar at 10:05 a.m. in İstanbul on Wednesday, rising for a second day, after it slid to a record low of 7,23 per dollar in early trade in Asia on Monday.
Turkish authorities have taken a series of measures to defend the lira amid a political crisis with the United States. Those steps have included the central bank raising interest rates in its regular auctions and freeing up lira and dollar liquidity for banks.
The lira also strengthened on Wednesday after a White House official told Reuters that the United States might impose further sanctions on Turkey “in a few days or a week”, raising expectations that such breathing space might bring calm and allow time for the Turkish government to expedite Brunson’s release.
On Friday, Turkey’s Foreign Ministry said Turkey would retaliate against the raising of steel and aluminum tariffs by the US administration. Foreign Ministry Spokesman Hami Aksoy said on Twitter that President Donald Trump’s decision, which also violates World Trade Organization rules, does not comply with “state seriousness.”
Turkey’s parliament speaker, former Prime Minister Binali Yıldırım, told a group of ambassadors that Turkey is waiting for the US to make the first move towards reconciliation between them, according to a report by Bianet.
“The American administration must seek a solution in the framework of respect for our laws rather than trying to force through what it wants by a series of speeches, sanctions and its president’s irresponsible tweets,” Yıldırım said.
“We still believe there is a chance to solve this. … It is the American administration, however, that needs to take the first step on this issue and to arrive at a consistent position,” said Yıldırım.
Turkey will not be forced into political moves through economic measures, Yıldırım said and added that the Turkish people understood that their existence and future was under systematic attack from the US.
ATC urges direct dialogue between US and Turkey
On Monday the US-based American-Turkish Council (ATC) said Ankara and Washington must increase dialogue and return to the negotiating table to resolve their crisis. The business group said it “is deeply troubled by the US Administration’s increased steel and aluminum tariffs levied against Turkey,” in a statement.
“The tariffs do not make business sense and will hurt the American companies and workers who rely on Turkish metals to meet their customers’ needs,” the ATC said. The organization asserted the business relationship between Ankara and Washington has historically been based on mutual respect and cooperation.
“The ATC implores the Trump Administration to reconsider this escalation of a trade war that is without winners and to resolve this dispute at the negotiating table,” it said. The American-Turkish community must work to encourage both sides to find positive terms and common ground to anchor the relationship between the two NATO allies, according to the ATC.
“We must inspire increased dialogue, seek greater collaboration, and support the efforts to strengthen our trade and investment ties in the near, medium, and long-term,” it said.
Turkish business world backs Erdoğan regime
Meanwhile, the Turkish business world is offering support for the success of the measures and goals of the government’s new economic prospective, two leading business organizations announced on Tuesday.
“We will overcome the current financial difficulties in solidarity with our people,” said in a joint statement issued by the Turkish Union of Chambers and Commodity Exchanges (TOBB) and the Turkish Industrialists and Businessmen’s Association (TUSIAD).
“Preserving the production and employment capacity of the real sector carries the utmost importance,” they added.
Stressing that the foundations of the country’s economy are solid, they said, “Our economy is facing a delicate period due to global developments and internal dynamics.”
To protect the real economy from a lasting impact, necessary measures must be taken promptly, the statement underlined.
The two organizations suggested a number of moves, including a tighter monetary policy to stabilize exchange rates, austerity measures, a roadmap to permanently bring down inflation, strengthening relations with Turkey’s most important trade partner, the EU, and continuing diplomatic efforts to urgently solve problems with the US under a strategic partnership framework.
“The business world firmly believes that our economy will quickly return to balanced and sustainable growth through the application of these necessary measures.”
Erdoğan advisor claims people returning to lira to profit in 12-48 months
Yiğit Bulut, one of the chief advisors to Turkish President Erdoğan, has claimed people who exchange foreign currency for Turkish lira will see a profit in 12 to 48 months.
Bulut’s remarks came in a column he wrote for the pro-government Star daily on Monday.
“Today is the time to return to the Turkish lira from foreign currencies. We will also see how those taking this step will get a profit within 12 to 48 months,” wrote Bulut. Bulut made the remarks at a time when the Turkish lira has seen a record fall against the US dollar. On Monday, the lira fell as low as 7,24 to the dollar.
On Friday the slide turned into a crash: The lira dropped as much as 18 percent, hitting the US and European stocks as investors took fright over banks’ exposure to Turkey. Due to the huge loss in the value of the Turkish lira, President Erdoğan called on Turks to exchange foreign currencies for the Turkish lira.
In his article, Bulut described Aug. 10, when the lira saw a record fall in value, as the financial July 15 of Turkey. July 15 refers to a controversial coup attempt in 2016 during which 249 people were killed and a thousand others were injured. “Will we surrender to this horrendous financial coup? Will we fight with each other? Never! Keeping in mind the call of our esteemed president, we will stand up for our money, country, and companies,” Bulut wrote.
Erdoğanist journalist hints release of Brunson
Meanwhile, Abdulkadir Selvi, an Erdoğanist journalist, wrote in the Hürriyet newspaper on Tuesday that Andrew Brunson, a US citizen detained in Turkey since 2016, could be released immediately under certain circumstances.
Selvi said the dispute over Brunson, which has contributed to the dramatic decline in Turkey’s economic situation in recent days, now resembles a “wrestling match” between US President Donald Trump and his Turkish counterpart, Erdoğan. As such, any solution to the crisis would require direct contact between the two leaders.
Discussing the possibility of Brunson’s release, Selvi suggested that should new information or new documents pertaining to the case appear, they could result in Brunson’s release. More specifically he wrote that “a document indicating that the long detention has negatively affected his mental health would suffice,” adding that under such conditions he could be released immediately.
However, Selvi also struck a cautious note, adding that even were the crises over Brunson to be resolved, “there is no doubt that another crisis will occur.”
The detention of Brunson, on charges the United States says are trumped-up, has contributed to a perception that Turkey’s judiciary is being used a political tool by the Turkish government, with some suggesting that he was detained to be used as a bargaining chip in negotiations with Washington. Turkey has disputed this account, stressing that its judiciary is independent of government control.