Turkey raises tariffs as economic battle with US continues

Industry News | | MIC Customs Solutions |

Turkey has continued its 'tit-for-tat' raising of tariffs against the US this week.

Turkey has increased taxes on American cars, alcohol, cigarettes and a raft of other products amid an escalating economic row between the two nations.

The measures were announced on Twitter by vice president Fuat Oktay as what he called a retaliatory measure towards "deliberate attacks" on Turkey's economy by the Trump administration.

Last week, US president Donald Trump doubled tariffs on imported Turkish aluminum and steel, placing increasing pressure on the Turkish lira. The currency had already lost more than 40 per cent of its value against the dollar this year.

As a result, Turkey raised taxes on US alcohol to 140 per cent and levies on cars to 120 per cent. Further charges were also placed on coal, rice, leaf tobacco and cosmetic products.

Turkish president Recep Tayyip Erdogan has also urged Turkish citizens to boycott US-made products and buy Turkish goods instead.

The moves comes as part of a series of rows between America and Turkey, largely stemming from the continued detention of an Evangelical pastor from North Carolina named Andrew Brunson.

Mr Brunson was arrested in Turkey in 2016 accused of espionage for Kurdish militants. Mr Trump has repeatedly demanded his release, but Turkish diplomats have so far refused.

In June, Turkey imposed tariffs on US goods worth $1.8 billion and Mr Erdogan has insisted the country will not bow down to economic pressure from America.

"We will respond to those who declared trade war on the entire world and included Turkey in it by steering toward new alliances, new markets," he added.

Meanwhile, investors are concerned about Turkish banks and companies holding some $350 billion in foreign debt and how this will be financed as inflation rises and the lira weakens.

It is expected that the rate of inflation could soar from the current figure of 15.4 per cent, leading to consumers facing rising prices for food and fuel.