On Friday, August 11, President Trump ordered doubling of U.S. tariffs on imported aluminium and steel from Turkey. The decision indicated the growing diplomatic spat with a NATO ally. In his Tweet, Trump justified increasing tariffs to 50 per cent on steel and 20 per cent on aluminium imported from Turkey by citing the decline in Turkish currency.
"Our relations with Turkey are not good at this time!" Trump’s tweet said.
The U.S. sanctioned Turkey’s justice and interior ministers were to protest what the administration calls the "unfair and unjust detention" of an American pastor.
While increased tariffs send a diplomatic signal, they are not likely to have a major economic effect in the U.S.
According to the Peterson Institute for International Economics, Turkey supplied 4.2 per cent of America’s imported steel and less than 1 per cent of imported aluminium in 2017. This shows it won’t have a significant effect on the US. However, it could be a significant diplomatic gesture and an injury on the export economy of the NATO ally.
The Turkish lira is on a record low level against the US dollar on Friday. The fall was driven by the economic policies of President Recep Tayyip Erdogan and the growing diplomatic row with the U.S.
Erdogan reportedly assured his country people on Friday that Turkey "will not lose the economic war."
Trump administration also cited Chinese Yuan movements last week when a possible increase in tariff rates on Chinese imports was called for.