Turkey's Economy Is Struggling, And That's Partly On The US

Qatar has close ties with Turkey whose President Recep Tayyip Erdogan is seen here being welcomed by Qatari Emir Sheikh Tamim bin Hamad Al Thani in Doha

Turkey's Economy Is Struggling, And That's Partly On The US

Meanwhile, a local court rejected an appeal by Pastor Andrew Brunson, a USA citizen who has lived and worked in Turkey for almost two decades, to be released from house arrest while he is awaiting a trial for espionage and terrorism-related charges.

The investment package was announced after Qatar's Emir Tamim bin Hamad Al Thani met President Recep Tayyip Erdogan in Ankara on Wednesday.

Trump in his first year in office expressed admiration for Erdogan and even congratulated the Turkish leader after a victory in a controversial referendum, but relations between the two countries have been increasingly fraught.

On Tuesday, a White House official quoted by the Reuters news agency hinted at further economic measures against Turkey if Brunson was not released. A lower court rejected the appeal on Wednesday, but Brunson's lawyer suggested to CBS News that he still had hope the higher court would reverse that decision.

Turkish Treasury and Finance Minister Berat Albayrak addresses people at a symposium organised by the Foundation for Political, Economic and Social Research (SETA) on the 17th foundation anniversary of the governing Justice and Development (AK) Party, in Ankara, Turkey on August 14, 2018.

Turkey said it would increase tariffs by 120 percent on autos, 140 percent on alcohol and 50 percent on rice among others, according to Turkish reports.

The U.S. recently slapped financial sanctions on two Turkish ministers and doubled steel and aluminum tariffs on Turkey over Brunson's continued detention. The punitive steps come after Erdogan called on Turks to boycott American electronics, like the iPhone, which have in any case become a lot more expensive as the lira lost nearly 40 per cent of its value this year. Since tightening his grip on power in June elections, Erdogan's relations with the US, a North Atlantic Treaty Organisation ally, have deteriorated.

Yet the Qatari announcement won't solve Erdogan's fundamental economic problems.

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Turkey's weakened currency, the lira, plunged by more than 20% in response to those United States sanctions.

Worldwide investors have been anxious by Turkey's high levels of foreign debt and Erdogan's refusal to allow the central bank to raise interest rates to support the currency, as experts say it should.

Despite Erdogan's remarks, Turkey would not go so far as to look for new allies, said Huseyin Bagci, a professor of global relations at the Middle East Technical University. Bar owner Burhan Coban said consumer and distributor prices for American whiskey are the same, for now, despite the currency plunges and the new Turkish tariffs. They can also demand debtors sell assets to repay loans.

The United States was the fourth largest source of imports to Turkey a year ago, accounting for US$12 billion of imports, according to International Monetary Fund statistics.

The turmoil has raised fears of a looming economic crisis in Turkey and prompted alarm that foreign investors in the country, including Qatar, could be hit in the fallout.

But support from Qatar and Germany can't fix Erdogan's problems, and the US has signaled it's unfazed by Erdogan's retaliations.

"There isn't much that Germany can do", Holger Schmieding, the chief economist at Berenberg in London, said by phone.

The U.S. Congress, in its 2019 defense policy bill, which Trump signed into law on Monday, prohibited the delivery of F-35s to Turkey until the Pentagon submits an impact assessment on U.S. military operations involving Incirlik Air Base and U.S.

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