Turkey’s Erdogan Talks Tough Publicly, Diplomats Talks Behind the Scenes
Tuesday, Turkey’s President appeared to escalate a dispute with the United States that has helped foment a Turkish currency crisis, declaring that his country will boycott US-made electronic goods.
Behind the scenes diplomats resumed formal talks to ease tensions.
Addressing a conference of his ruling party faithful in the capital, Recep Tayyip Erdogan added fuel to his dust-up with the US, even as local business groups called on his government to settle the dispute through diplomacy.
Investors seemed to look through the fiery rhetoric, driving the Turkish lira off record lows on reports that Turkish and US government officials held talks Monday.
“We will implement a boycott against America’s electronic goods,” President Erdogan told the conference. He suggested Turks would buy local or Korean phones instead of US-made iPhones.
It unclear how he intends to enforce his boycott of Apple iPhones.
The move is seen to be in retaliation to United States’ decision to sanction two Turkish ministers over the continued detention of an American pastor on terror-related charges, and to 2X tariffs on Turkish steel and aluminum imports.
Behind the scenes diplomatic dialogue has resumed.
Turkey’s state-run news agency and US officials say US National Security adviser John Bolton had met with the Turkish Ambassador to Washington Monday.
That helped ease tensions in financial markets, with the Turkish lira stabilizing somewhat near record lows. It was up 5% Tuesday, at 6.55 per USD, having fallen 42% YTD, with most of the losses happening in the past 2 weeks.
Investors are worried President Erdogan’s economic policies and the country’s high debt accumulated in foreign currencies. Independent economists say he should let the central bank raise interest rates to support the currency, but he wants low rates to keep economic growth going.
In a joint statement issued Tuesday, the industrialists’ group TUSIAD and the Union of Chambers and Commodity Exchanges called on the government to allow the central bank to raise interest rates to help overcome the currency crisis
The business groups also urged diplomatic efforts with the United States and an improvement in relations with the European Union, which is Turkey’s major trading partner.
The state-run Anadolu Agency said the nation’s Finance Ministerwould address hundreds of foreign investors Thursday in a teleconference.