Turkey's Erdogan pledges boycott on USA electronics

Galtero Lara
Agosto 15, 2018

Despite the harsh talk against Apple, The New York Times reports that Erdogan and his officials are frequently seen with iPhones in their hands.

Meanwhile, on Tuesday President Erdogan announced that Turkey will boycott American electronic products, adding that Turkey would produce a better version of every product previously bought with foreign currencies and would even export them.

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

Brunson, 50, was indicted by a Turkish court on charges of having links with the Kurdistan Workers' Party (PKK) militant group and the movement of the US-based opposition cleric Fethullah Gulen, whom Ankara accuses of having masterminded the July 2016 coup attempt against President Recep Tayyip Erdogan.

In a direct threat against the White House, Erdoğan warned U.S. president Trump, who signed off the sanctions, of unspecified consequences for punishing Turkey. But "thanks to God, our economy is functioning like clockwork", he maintained.

The currency has lost 20 per cent of its value against the dollar and fallen more than 40 per cent this year amid tension over Mr Erdogan's control over the economy and deteriorating relations with the US. The declaration comes as a trade war between the United States and Turkey has caused the Turkish currency, the lira, to plummet over the past few days, sending shockwaves throughout global markets.

Turkey has traditionally suffered from a large current account deficit.

The owner of a store that sells goods for brides-to-be said the lira's devaluation against foreign currencies has affected his ability to import goods.

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Why is Erdogan mad at the United States?

What about the Turkish economy?

Credit-fueled growth helped the Turkish economy grow and boosted the government's popularity through increased consumption and major construction projects.

"We are already seeing some signs of contagion". The lira shed another 8% to below 7 per dollar after a double-digit percentage slide Friday.

The pressure on Turkey is reflective of broader trends in emerging markets, although the lira is by far the worst performer. However, other countries - such as Mexico and South Africa - also took advantage of low USA interest rates in the years after the financial crisis to borrow heavily in dollars and saw their currencies coming under pressure.

To force Turkey into releasing the pastor, the Trump administration began doubling tariffs on imported Turkish steel and aluminum last week. He renewed a call on Turkish citizens to convert their dollars into the local currency.

The imprisonment of U.S. pastor Andrew Brunson has weighed heavily on relations, leading to a series of escalations.

Brunson, from North Carolina, was arrested almost two years ago in Turkey and accused of aiding terrorist groups.

"It's purely technical and Turkey needs a complete rebalancing of its economic business plan, and very sharp rate hikes and a strong commitment that the central bank will be independent", Credit Agricole's senior emerging markets strategist Guillaume Tresca told Reuters.

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