Turkey releases Greek soldiers as it slaps 140% tariff on American alcohol

President Erdogan yesterday blamed “economic terrorists” for the nation’s woes

President Erdogan yesterday blamed “economic terrorists” for the nation’s woesKAYHAN OZER REUTERS

Turkish President Tayyip Erdogan attends a news conference in Ankara, Turkey, August 14, 2018.

A treasury desk trader at one bank said this "development showed relations with the European Union could recover while tense relations continue with the USA".

President Donald Trump had previously announced that the United States was doubling steel and aluminium tariffs on Turkey, as the two North Atlantic Treaty Organisation allies row over the detention by Turkish authorities of American pastor Andrew Brunson.

Turkey's Vice President Fuat Oktay said in a post on his official Twitter account that the new tariffs came within the framework of the reciprocity principle.

Earlier this month, the U.S. Treasury Department sanctioned Turkey's ministers of Justice and Interior in response to the continued detention of the pastor, who has lived in the country for 20 years and heads an evangelical congregation of about two dozen people in the port city of Izmir.

The crisis has sent the Turkish currency into free fall since Friday.

According to a presidential decree released on Wednesday, the tariffs on goods such as cosmetics, rice and coal have been raised to 100 percent while those on alcoholic drinks, passenger cars and leaf tobacco have reached 140, 120 and 60 percent, respectively.

Investors are anxious not only about Turkey's souring relations with the U.S., a longtime North Atlantic Treaty Organisation ally, but also Turkish President Recep Tayyip Erdogan's economic policies and the country's high debt accumulated in foreign currencies.

He also made his now famous speech on the night of the July 2016 failed coup calling citizens out into the street through FaceTime, an iPhone app.

Moves by the central bank to ensure Turkish banks have liquidity and a planned conference call by Turkish Finance Minister Berat Albayrak, who is Erdogan´s son-in-law on Thursday have gone some way to giving reassurance to investors.

However, severe changes in the value of the currency calmed Tuesday after news that USA national security adviser John Bolton had met with the Turkish ambassador to Washington Monday.

The dispute between the US and Turkey has started an economic crisis in Turkey that has pushed its currency to historic lows. Last week it dropped 16 percent in one day.

Turkish officials have also been keen to emphasise that Ankara wants to retain strong ties with Europe, which has also expressed deep unease with Trump´s trade policies.

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