Trump doubles steel and aluminum tariffs on Turkey

At midday: Turkey turmoil rocks world stock markets

At midday: Turkey turmoil rocks world stock markets

The United States is turning its back on Turkey and putting relations between the North Atlantic Treaty Organisation allies in jeopardy, Recep Tayyip Erdogan warned on Saturday after the US President Donald Trump doubled tariffs on Turkish steel and aluminium.

The latest escalation between Ankara and Washington was denounced by the Turkish press, with pro-government daily Sabah saying "the currency attack" was no different from the attempted coup of July 2016.

Turkey's currency fell Friday after its economy was rattled by the United States' move to slap the country with more tariffs.

South Africa's rand took a sharp hit on Friday, over heightened worries that country might be next to face similar troubles to Turkey, like high inflation, an overheating economy and a lack of credible central bank independence.

"We are preparing to trade in our local currencies with the countries that we have the largest trade volume such as China, Russia, Iran, and Ukraine".

BBVA, owner of nearly 50 per cent of Istanbul-based Turkiye Garanti Bankasi AS, fell more than 5 per cent. Garanti and its local peers face a wave of corporate defaults and loan restructurings as the lira's collapse makes it harder for Turkish companies to repay the dollars they have borrowed in recent years.

U.S. President Donald Trump said on Friday that he had doubled steel and aluminium tariffs on Turkey, adding to the pressure on the nation's troubled economy amid a diplomatic row with Washington.

He also repeated his call to Turks to sell their dollar and euro savings to shore up the lira. "The entire Turkish public is against United States policies that disregard Turkey's legitimate security demands", Kalin, also a spokesperson for Erdogan, wrote for the pro-government Daily Sabah newspaper.

He said: 'There is definitely contagion from Turkey across emerging markets. Financial upheaval there risks further destabilising an already volatile region.

In Rize, Erdogan said the United States would pay a price by challenging Turkey for the sake of "petty calculations", denouncing Washington for declaring "economic war on the entire world" and holding countries "for ransom through sanction threats".

Trump announced the punitive doubling of tariffs on Twitter, with the White House saying the sanctions would take effect from 13 August, AFP reported.

But Turkey's trade ministry said the tariffs were against World Trade Organisation rules. He has denied the charges.

The sides held talks in Washington this week but failed to resolve the spat. And swift currency swings or securities-market routs can catch banks' traders off guard, saddling them with losses while trying to facilitate client transactions. According to figures from the Turkish Government, for the period of 2002 to October 2017, Turkish direct investments in the United States reached $3.7 billion while USA investments in Turkey amounted to $11.1 billion, second only to the Netherlands' 21.6 billion.

Erdogan said high foreign exchange rates were being used as a weapon against Turkey.

"Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks. This is a national, domestic battle", he told a crowd in the northeastern city of Bayburt.

"Some countries have engaged in behaviour that protects coup plotters and knows no laws or justice", he said.

Erdogan urged Washington to give up the misguided notion that bilateral relations could be "asymmetrical" and realise that Turkey had alternatives "before it is too late".

In an opinion piece in the New York Times Friday, Erdogan wrote "failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies".