IPhones, US Electronics Face Boycott in Turkey Amid Trade War

Cornelia Mascio
Agosto 15, 2018

Turkey's President threatened Tuesday to boycott USA electronic goods because of what he calls an economic war against Turkey by the United States. Behind the scenes, however, diplomats resumed contact to ease tensions.

Turkish President Tayyip Erdogan makes a speech during a ceremony marking the second anniversary of the attempted coup at the Presidential Palace in Ankara, Turkey, July 15, 2018.

"We will see that our Turkish lira will be even stronger", he added.

Erdogan said his government would offer further incentives to companies planning to invest in Turkey and said firms should not be put off by economic uncertainty.

It's not clear how Erdogan would enforce the boycott, the AP noted. The lira lost a quarter of its value this month as Donald Trump doubled tariffs on Turkish steel and aluminum imports and slapped sanctions on two ministers.

Behind the scenes, however, diplomatic dialogue appears to have resumed.

Turkey's ambassador to Washington Serdar Kilic on Monday held talks with US National Security Advisor John Bolton in a meeting what Foreign Minister Mevlut Cavusoglu said was arranged by the White House.

Investors fear the country's financial crisis could spread, with Mr Erdogan describing the crash as a "political plot" against Turkey.

The Turkish lira has nosedived in value in the past week over concerns about Erdogan's economic policies and after the USA slapped sanctions on Turkey angered by the continued detention of an American pastor.

"If we divert our money to foreign currency.then we will be in the position of having surrendered to the devil", Erdogan said.

Sources tell the Guardian this simple misunderstanding, that took place at a one-on-one conversation with only translators, caused the lira crisis.

Turkey will soon be "selling high tech and design products to the world", Erdogan insisted during his speech. On Tuesday, he said the government is working on steps to help banks and support companies affected by the currency crisis. The evangelical pastor is on trial for terrorism charges.

Brunson, 50, is being tried on espionage and terror-related charges, which he and the USA government vehemently deny.

How much has Turkey's currency dropped?

But Bloomberg analysts have cautioned Turkey's economic conflict with the U.S. could prompt Mr Erdogan to start looking for new allies. Retail investors in Turkey are understood to have sold $50m (£39m) to $60m in foreign currency with the jump in the lira exaggerated by thin trading volumes, according to Bloomberg.

Independent economists caution it would be hard to unseat the dollar as the top reserve currency as it is used widely in the global economy, for example to trade in oil and for commercial deals.

"We view the policy of sanctions as unlawful and illegitimate, driven mostly by a desire to dominate everywhere and in everything, dictate policies and call shots in global affairs", Lavrov said. "Such policy can't be a basis for normal dialogue and it can't last long".

After all, Turkey's economy is around four times the size of Greece's.

On Monday, Erdogan criticized his American counterpart, saying Washington was seeking to stab Turkey "in the back".

"I hope that some of the major European governments are going to follow suit", she said. "That's why we are directly impacted in an extreme way".

"Most of the products we sell come from overseas, the raw materials".

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