Relations with Turkey are not good!

Relations with Turkey are not good!

The Trump administration's original move in March to raise tariffs on most steel and aluminum imports was proposed to safeguard United States jobs against overseas rivals.

He also said it was wrong of the USA to try to bring Turkey into line with threats, a day after Trump doubled tariffs on steel and aluminium imports from Turkey.

The meetings came as Turkey seeks to stanch an economic meltdown amid fallout from USA sanctions imposed last week over the continued detention of the pastor, Andrew Brunson, who was jailed on espionage and terrorism suspicions more than two years ago and recently released to house arrest.

"It's pretty remarkable how far the Trump administration is willing to go - putting at jeopardy the relationship with a North Atlantic Treaty Organisation ally over a preacher".

The added weakness in Turkish currency - that has seen it plunge a further 10% - comes as disappointment set in after talks between Turkish and USA diplomats in Washington failed to result in a compromise that was likely to ease sanctions.

Erdogan has cast the recent slide in the lira as a war and without naming countries said supporters of a failed military coup two years ago, which Ankara says was organized by a US -based Muslim cleric, were attacking Turkey in new ways since his re-election two months ago.

President Recep Tayyip Erdogan's current dash for growth coupled with unorthodox pronouncements on monetary policy - including that lower rates can bring down inflation - have put him on a collision course with markets.

The Turkish lira hit a record low of 6.24 per dollar on Friday, before recovering to 5.92 _ still down a whopping 7 per cent on the day.

"This is a national, domestic battle".

The external value of the lira is not a prime concern of Erdogan's core supporters, many of whom have no plans for foreign holidays and readily accept government rhetoric that economic problems are caused by outsiders seeking to weaken Turkey. The lira fell further as Erdogan spoke.

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But the trade minister, Ruhsar Pekcan, said: "We implore President Trump to return to the negotiating table".

He also urged Trump to recognize the 1915 Turkish slaughter and exile of 1.5 million Armenians as a genocide, which US presidents have declined to do for decades. Over the last year the Lira has lost 33% of its value and its cost of servicing its debt has risen to the highest level in 9 years.

The White House also cited currency movements in China last week when Trump called for a possible increase in tariff rates on Chinese imports.

The Brunson dispute triggered the collapse in the Turkish currency as investors feared US financial sanctions.

Ankara sent a delegation this week to Washington to meet with both the State and Treasury Departments to resolve some of the disputes but those talks showed no signs of breakthrough. "Don't worry", Erdogan told a crowd in the northeastern city of Bayburt. While many of Turkey's challenges are specific to that country, there are certain characteristics - a heavy debt load following a prolonged, low U.S. interest-rate driven borrowing binge in dollars - broadly shared throughout emerging markets.

Markets are deeply concerned over the direction of domestic economic policy under Erdogan with inflation at almost 16 per cent but the central bank reluctant to raise rates in response.

"This will be my people's response to those who have waged an economic war against us", he said.

The new system also increased Erdogan's control over the central bank, which on July 24 baffled markets by leaving rates unchanged despite inflation that in July came in at 15.85 percent.

Erdogan had raised eyebrows Thursday when he appeared to invoke divine intervention, saying: "If they have dollars, we have our people, we have our right and we have Allah!"

"Unless the United States starts respecting Turkey's sovereignty and proves that it understands the dangers that our nation faces, our partnership could be in jeopardy", Erdogan said.

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