U.S. President Donald Trump introduced a round of sanctions on August 1, preventing the Turkish justice an interior ministries from doing business with U.S. businesses. The currency is currently down 13.5% against the United States dollar, after a brief 20% fall, resulting from a Trump tweet that declared, "Aluminum will now be 20% and Steel 50%", and concluded: "Our relations with Turkey are not good at this time!"
Recep Tayyip Erdogan was responding to a drop in the value of the Turkish currency, the lira, against the USA dollar following the imposition of sanctions and tariffs by the United States in the past two weeks. "You are exchanging your strategic partner in North Atlantic Treaty Organisation for a priest". "You impose sanctions on our Halkbank. and then you expect different treatment from Turkey?" said Erdogan, in a second speech in the same city.
"Interest rates should be kept to a minimum because they are a tool of exploitation that makes the poor poorer and the rich richer", he said.
Erdogan is a self-proclaimed "enemy of interest rates" and has pushed for unorthodox policies like cutting borrowing costs in the face of accelerating inflation.
Erdogan has downplayed the currency crisis, urging Turks to convert any stashed-away gold or foreign currency into lira, thereby waging a "war of independence" against America.
"I'm not aware of any prior administration using tariffs in this way, and there's a very simple reason: because they're an incredibly blunt instrument that often can have blowback on American workers and consumers as we've seen in the China context", said Ned Price, a former Central Intelligence Agency officer who also served as a National Security Council spokesman during the Obama administration.
"If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks".
Ankara had already taken measures to respond and would continue doing so, he added. "Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies", Erdogan said.
The United States gave Turkey a deadline until last Wednesday, Turkish President Tayyip Erdogan said on Sunday, to release an American pastor being tried by a Turkish court.
Writing on Twitter, Iran's Foreign Minister Mohammad Javad Zarif also accused Washington of an "addiction to sanctions and bullying".
While Turkey's economy is only the 17th largest in the world, there are a number of concerns that Trump's latest trade war is only further disrupting global commerce, damaging longtime alliances, and threatening global economic growth.
"The US has to rehabilitate its addiction to sanctions (and) bullying or the entire world will unite - beyond verbal condemnations - to force it to", he warned.
Iran has also suffered a major tumbling of its currency this year partly over the reimposition of U.S. sanctions after Trump abandoned the 2015 nuclear deal.
The lira dropped by over 11 percent in value in one day on Friday morning to almost six lira per dollar.