Is Turkey’s Economy Indestructible?
When it comes to the Middle East, the US and Turkey are on very different wavelengths. Trump just fired “obliterating” tariffs towards Turkey’s economy, but investors can’t stop laughing. The lira was up 1% against the dollar during yesterday’s trading, so who’s the turkey now?
“They must have been duds, Mr. President.” That or his relationship with Turkish leader Erdogan is just too important for the shredder. 50% tariffs were levied on Turkish steel, barely any of which actually goes to America. A new trade deal was cast aside, but it was years away from completion anyway. And a few individuals were used as cannon fodder for less severe sanctions than anticipated. It had been a nervy build-up for the emerging market of Turkey, but this is precisely the anti-climax that investors hoped for!
It all started when President Trump pulled US forces out of Northern Syria, clearing a path for Erdogan to go agro across the border against Syrian forces. In the beginning, it was all for one and one for all against ISIS. Now, the Americans have bailed, the Turks are at Syrian throats, and the ISIS prisoners are escaping. Way to go, guys!
Erdogan’s trigger finger has put his delicate economy in jeopardy. A few months ago, he held a US pastor captive which prompted tariffs that sent the lira to an all-time low. Later, he axed the head of his central bank. Turkish stocks are proving difficult to kill off!