Trump’s administration announced on Friday doubling the tariffs against Turkey to 20 percent for aluminum and 50 percent for steel, which indicates the deteriorating diplomatic tension between the United States and Turkey and exerts economic and political implication worldwide.
The risen tariff consists of a part of the trade war launched by Trump. Specialized to the import of metal resources, Trump has tightened the restrictions out of the consideration of the national security risk induced by the use of foreign metals, including imports from Turkey. The doubling of tariffs is used as a weapon to address the increasingly weakening Turkey’s currency, the Lira, against the US dollar, which may impair the effectiveness of existing tariffs.
In addition to economic considerations, this action also reflects the exacerbating diplomatic tension between US and Turkey, which may involve disposal of an American pastor Andrew Brunson, who was accused by Turkey government for espionage. While it is clear that Trump utilizes economic punishments as a weapon to force compromises from other countries, there is no evidence showing the connection between the tariff policy and the release of the pastor.
The lifting of tariffs on steel and aluminum against Turkey may cause both economic and political spillovers worldwide. The continuously declining economy of Turkey has cast a shadow over emerging economies; furthermore, since both US and Turkey are members of North Atlantic Treaty Organization, the conflict between the two countries could spread to other nations ultimately.
Trump takes aim at Turkey, announcing doubling of steel and aluminum tariffs in effort to punish country
President Trump said Friday that he told his administration to double steel and aluminum tariffs against Turkey, reflecting the rapidly deteriorating state of relations between the two countries.
The announcement would mark a major policy shift, but it was made in a Twitter post with little context. Trump remarked that Turkey’s currency, the lira, was weakening against the U.S. dollar, a phenomenon that had made existing tariffs less effective.
Doubling the tariffs to 20 percent for aluminum and 50 percent for steel would magnify the impact of the trade restrictions.
Trump’s move reflects a confluence of factors that have led to worsening relations between the White House and Turkish President Recep Tayyip Erdogan, and his willingness to ratchet up economic pain on Turkey could lead to a much bigger clash.
Both countries are members of the North Atlantic Treaty Organization, which could end up pulling other nations into the diplomatic skirmish. And the U.S. Air Force has used Incirlik Air Base in southern Turkey for years, even though a number of people in Turkey have pressed to have the U.S. forces expelled.
The Treasury Department slapped sanctions on two Turkish officials last week because the country refused to release American pastor Andrew Brunson, who faces charges in Turkey that include attempting to overthrow the government and espionage.
The White House and Turkish government had been in discussions for weeks about what it would take to return Brunson to the United States. The Washington Post reported last month that Turkey’s exact demands were unknown, but Ankara had a long list of complaints, including the United States’ unwillingness to extradite a Turkish citizen who Erdogan claims is responsible for a failed 2016 coup attempt.
U.S. officials have alleged that the charges against Brunson are bogus, and Trump tried to secure a deal for his release. But it fell apart when a Turkish court, rather than sending Brunson home, ordered that he be transferred to house arrest while he awaits the resumption of his trial, scheduled for October.
“This innocent man of faith should be released immediately!” Trump wrote in another Twitter post when it became clear that Turkey would not release him.
The steel and aluminum tariffs stem from the trade fight that Trump launched earlier this year with a number of countries, including Turkey. Trump has declared that the reliance of U.S. importers on foreign metals poses a national security risk to the United States, and he has increased the cost of these imports on a range of countries, including Japan, Turkey and members of the European Union.
Turkey has vowed to retaliate, but its currency has steadily weakened in recent months, removing some of the bite of the tariffs by making Turkish goods cheaper for U.S. consumers. One way to address that, as Trump signaled Friday, is to double the tariff rate.
Steel imports from Turkey have already fallen sharply, according to government data. Only 4 percent of U.S. steel imports came from Turkey in the first half of 2018, with the volume dropping almost 50 percent from 2017, according to data from the Office of the U.S. Trade Representative.
Trump has made clear that he is hoping to use the economic pain caused by these tariffs to force other countries to agree to a range of concessions, particularly focused on Canada, the European Union and China. But he has so far not drawn a connection between lifting the steel tariffs and urging Turkey to release the Christian pastor. It was unclear from his Twitter post Friday whether he was directly linking the two or whether he was simply trying to find a way to make the tariffs more painful, given the lira’s slide.
Source: Washington Post, Damian Paletta, August 10, 2018. Photo credit to Brendan Smialowski.