Turk’s in for Very Hard Times Under US Sanctions
$USDTRY: -1.93% to 5.837 at the close Thursday in New York
- Lira slides from session high after US Treasury Secretary Steven Mnuchin said Turkish officials will face new sanctions if the country does not release Pastor Andrew Brunson in short order
Turks are reacting with defiance to their plunging Lira and an escalating trade and political dispute with the United States — an indication that they are ready to endure economic pain and risk further deterioration in a Key, yet troubled alliance dating from the Cold War.
Analysts question the effectiveness of any Turkish boycott of US goods and view Turkey’s tit-for-tat taxes imposed Wednesday on American exports, including cars, tobacco and alcohol, as mostly symbolic because they have relatively little value to a global trade giant engaged in similar disputes with China and other major economies.
The Turkish government’s framing of its problems as an epic battle for sovereignty against outside enemies, particularly US President Donald Trump, resonates among core supporters, even as fears grow that further falls of the Turkish Lira could threaten bankruptcies among Turkish firms carrying high foreign currency debt.
While Turks who voted now President Erdogan to election victory in June recognize they could face hardship, there is little domestic criticism of a leader who presided over years of debt-fueled growth that drew warnings of a looming bust and currency crisis.
Turkey is deeply divided between President Erdogan’s pious Muslim base and secular Turks who once held sway over the country, but opposition voices have been mostly muted as President Erdogan projects an image of a righteous state under siege.
Cevdet Erdol, President of the Health Sciences University in Istanbul, urged Turks to boycott US tobacco products and “to stop smoking altogether,” according to Turkey’s state-run Anadolu news agency.
Analysts expect the currency crisis to persist or even worsen, and the feud with the United States simmered as a Turkish court rejected an appeal for the release of Andrew Brunson, an American pastor being tried in Turkey on espionage and terrorism-related charges.
Washington has imposed financial sanctions on 2 Turkish ministers and 2W’d steel and aluminum tariffs on Turkey as The Trump Administration demands the release of Pastor Brunson, who it says was framed.
The long relationship between Turkey and the United States has always been tenuous and often in crisis management mode.
Pastor Brunson is perhaps just the tip of the iceberg.
Some Turks have taken to selling their Gold for extra cash as the crisis starts to bite.
Have a terrific weekend