Turkish President Recep Erdogan said Turkey would boycott electronics products from the United States. He showed that the American supply of electronics was replaceable. This move has faced mixed reactions from the streets of Turkey; some willing to ‘die’ for it while some a bit hesitant. Besides, Turkey’s leading telecom firm and its national airline will halt advertising in US media. The US has imposed sanctions while still raising tariffs against Ankara. The restrictions are to the detention of a US evangelical pastor Brunson. Turkey’s currency had slid and saw the economy struggle. The slide was a result of the sour relationship between Ankara and Washington. However, the economy has taken necessary measures, and the currency is now steady.
- It is Turkey’s currency. Lira crushed to an all-time low of 7.24 to the dollar on Monday. The fall is due to the money-losing more than 40 percent of its value this year. The primary reason behind the loss of purchasing power of Lira is attributed to President Edorgan’s calls for lower borrowing costs. Disputes between the two countries are critical when evaluating the currency fall.
- Lira’s weakness has had substantial effects experienced in the international market. On Friday 10th the currency dropped with a tune of 18 percent and hit both European and US stocks; caused by investors fretting about banks’ exposure to Turkey.
- Regained some ground on Tuesday 14th when it traded at 6.3300 to the dollar at 1947 GMT. This was some 9 percent recovery from Monday’s close and having earlier on touched 6.2995. The improvement was supported by the news that there was a planned conference call on Thursday 16th. The meeting would lay a platform for Turkey’s finance minister to reassure investors who were concerned with Turkey’s President influence over the economy. The minister would also elaborate on Edogarn’s resistance to borrowing rate hikes in attempts to fight double-digit inflation.
The president believed that Turkey was a target of an economic war. He made calls to Turkey citizens to sell euros and dollars to strengthen the currency. He talked of the need to have the government, and Turks stand decisively against forex prices, inflation, the dollar and the interest rates. Edogarn said it was only possible to guard the nation’s economic independence if both the government and citizens walked together. All this he said when giving a speech to members of his Justice and Development (AK) Party.
The US has sanctioned two Turkish government ministers. The restrictions were in reaction by the US to the trial on terrorism charges leveled against evangelical Pastor Andrew Brunson in Turkey. The United States also raised tariffs on Turkish metal exports to the US.
Speaking on the issue, Heather Nauert (State Department spokeswoman) said Turkey’s economic woe did not originate from US sanctions. She noted that economists would tell that US sanctions had nothing to do with Turkey’s economy wobbling.
- Trump Frustration.
A press release on Tuesday 14th August indicated that President Trump was still frustrated that Turkey had not yet released pastor Brunson. Subject of concern was also holding of employees of diplomatic facilities as well as US citizens. A White House insider hinted that the US was sending a warning to Turkey.
- Will Turks Heed to Edorgan’s Calls?
It is unclear if the Turks would sell their dollars as requested by the president. However, an Istanbul’s news agency said traders on Tuesday 14 August, converted 100,000 US dollars which is historic for Istanbul Eminonu district.
When protesting, a group of the Turks chanted damn America slogans with banners saying that they will win the economic war. The group made calls to have the dollars burnt and proceeded to a bank branch to convert the dollars, reported the agency.
Some questioned the ability to boycott the US electronics. It would be hard for Turks to boycott US electronics especially teenagers.
- Economic Pain
As explained earlier, Turkey’s currency gained some strength against the dollar. However, investors are worried that measures taken by Turkey Central Bank did not address the fundamental causes of Lira weakness. Dollar-denominated bonds issued by Turkish banks continued to fall while sovereign bonds steadied.
The two countries have their relations hurt by a series of issues which include;
- Different interests in Syria
- Detention of Pastor Andrew Brunson
- Turkey’s plan to purchase defense systems from Russia
Turkey had said that pastor Brunson case was in courts and a Turkish judge had moved Brunson to house arrest.
Brunson’s lawyer on Tuesday 14th said he had applied anew for the pastor’s release.
Politics and trade are significant causes of differences between countries. Turkey happens to be at the center of trumps adventures to revive United States glory. Until a few years ago, Turkey’s economy was booming. The boom was an effect of roles played by the US. Disputes are not new between Turkey and the US, although the two countries remained close allies. The trade barriers have just gone too far. Who is who? Will Turkey release Brunson? Will the US lessen the trade barriers?