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Abu Dhabi, UAEMonday 24 September 2018

Turkey escalates US feud by increasing tariffs on products

Extra tariffs placed on imports such as rice, vehicles and cosmetics

Turkey is likely to face another credit rating downgrade unless it takes measures to tackle rising risks of a balance of payments crisis, Moody's says. AP Photo
Turkey is likely to face another credit rating downgrade unless it takes measures to tackle rising risks of a balance of payments crisis, Moody's says. AP Photo

Turkey is increasing tariffs on imports of United States products, escalating a feud that has also triggered a currency crisis.

The country's Official Gazette announced on Wednesday the higher tariffs on a series of products including rice, vehicles, alcohol, coal and cosmetics.

Turkey's Vice President Fuat Oktay said on Twitter that the tariffs were increased "within the framework of the principle of reciprocity in retaliation for the conscious economic attacks by the United States".

The Turkish lira has dropped to record lows in recent weeks, having fallen 42 per cent so far this year. The currency has now stabilised at around 6.50 lira against the dollar.

Investors are worried not only about Turkey's souring relations with the US, a longtime NATO ally, but also Turkish President Recep Tayyip Erdogan's economic policies and the country's high debt accumulated in foreign currencies.

Turkey has accused the US of waging an "economic war" as part of a plot to harm the country.

Washington has imposed financial sanctions on two Turkish ministers and doubled steel and aluminum tariffs on Turkey, as US President Donald Trump tries to secure the release Andrew Brunson, an American pastor being tried in Turkey on espionage and terrorism-related charges.

The decision to impose new tariffs came a day after Mr Erdogan said Turkey would boycott US electronic goods, singling out iPhones. He suggested Turks would buy local or Korean phones instead, although it was unclear how he intended to enforce the boycott.

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Read more:

Life in Turkey: 'Things are not going in a good direction'

Erdogan says Turkey will boycott US electronics

Editorial: Turkey's economic crisis is of Erdogan's making

Lira rout helps Turkish firms buy bonds back on the cheap

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