The embattled Turkish lira tumbled almost 20 percent to new record lows against the dollar on Friday as strains with the United States intensified, but President Recep Tayyip Erdogan defiantly proclaimed Turkey would emerge victorious in an "economic war".
Compounding the lira's agony, President Donald Trump said he had doubled steel and aluminum tariffs on Turkey, noting that relations between the NATO allies were "not very good".
The lira's plunge is one of the most serious economic crises that Erdogan has faced since coming to power in 2003 in the wake of a financial crisis in 2001 that brought the economy to near meltdown.
In a Twitter post on August 10, the U.S. president also referenced the rapid decline of the NATO ally’s national currency against “our very strong dollar.”
"I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar!" Trump wrote.
"Aluminum will now be 20 percent and Steel 50 percent. Our relations with Turkey are not good at this time!" he added.
I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!— Donald J. Trump (@realDonaldTrump) August 10, 2018
In June, the United States imposed tariffs of 10 percent on aluminum imports and 25 percent on steel against many key global partners, complaining of unfair trade practices.
The new tariff threat targeting Ankara comes as bilateral tensions have risen over the detention and trial in Turkey of U.S. pastor Andrew Brunson, 50.
The pastor has been held since 2016, charged with "committing crimes on behalf of terror groups without being a member," a reference to Kurdish separatists and a group that President Recep Tayyip Erdogan blames for a failed 2016 coup attempt against him.
Brunson, who faces up to 35 years in prison, was transferred to house arrest on July 25 as his trial continues.
Trump on July 26 threatened to impose "large sanctions" on Ankara if the government did not immediately let Brunson leave Turkey.
The sanction and tariff threats have led to a near-collapse of the Turkish lira -- which tumbled 19 percent on August 10 alone -- and forced Ankara into cost-cutting steps to stabilize the economy.