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Trump escalates feud with Turkey, imposing higher metals tariffs

By Lisa Lambert
U.S. President Donald Trump talks to Turkey’s President Recep Tayyip Erdogan at NATO headquarters in Brussels, Belgium July 11, 2018. Tatyana Zenkovich/Pool via REUTERS

By Lisa Lambert

WASHINGTON (Reuters) - U.S. President Donald Trump intensified his spat with Turkey on Friday by imposing higher tariffs on metal imports, putting unprecedented economic pressure on a NATO ally and deepening turmoil in Turkish financial markets.

Criticizing the state of the U.S. relationship with Ankara, Trump announced on Twitter that he had authorized a doubling of duties on aluminum and steel imported from Turkey, making them 20 percent and 50 percent respectively.

The White House said Trump would use a section of U.S. law that allows for tariffs on national security grounds to impose the increased duties.

Washington and Ankara have been at odds for months over an American pastor detained in Turkey, the Syrian civil war and other diplomatic issues.

Trump's move sent Turkey's lira currency deeper into tailspin. The lira, which has long been falling on worries about the government's influence over monetary policy and the U.S. tensions, plunged more than 18 percent at one point on Friday to a record low against the dollar.

Even before Trump's announcement, President Tayyip Erdogan told Turks to exchange gold and dollars for lira in order to fight "an economic war." Waves from the crisis spread abroad, with investors selling off shares in European banks with large exposure to the Turkish economy. nL5N1V12A6]

"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 said in an early morning post on Twitter.

"Aluminum will now be 20 percent and Steel 50 percent. Our relations with Turkey are not good at this time!"

The United States, the world's biggest steel importer, imposed tariffs of 10 percent on aluminum and 25 percent on steel in March for imports from a variety of countries. Turkey is the sixth-largest steel exporter to the United States.

Ankara sent a delegation this week to Washington to meet with both the State and Treasury Departments to resolve some of the disputes but those talks showed no signs of breakthrough.

Last week, the United States imposed sanctions on Turkey's justice minister and interior minister for not releasing U.S. pastor Andrew Brunson.

Brunson, an evangelical Presbyterian pastor from North

Carolina, was jailed for allegedly supporting a group that

Ankara blames for an attempted coup in 2016. Brunson denies the

charge. His cause resonates with Christian conservative supporters of Trump, who could also be influential as Republicans seek to retain control of Congress in midterm elections in November.


'UNCHARTED WATERS'

Trump and Turkey's Erdogan have had an up-down relationship.

At the U.N. General Assembly last year, Trump called Erdogan a "friend" who got "very high marks" for how he runs the country.

Just weeks ago, Trump was reported to have fist-bumped Erdogan during a NATO meeting in Brussels.

Aaron Stein, senior fellow at the Atlantic Council think tank in Washington, said Trump has "personalized the Brunson issue and feels like Erdogan cheated him."

"We are in uncharted waters here. No idea how this ends, or where Ankara wants to take this but it’s going to be a wild ride,” Stein said.

In addition to the Brunson case, Washington is seeking the release of three locally employed U.S. embassy staff. Trade issues and differences over Syria have also strained bilateral ties.

Turkey also wants the United States to extradite Fethullah Gulen, a Pennsylvania-based Muslim cleric who Turkish authorities say masterminded the coup attempt against Erdogan in which 250 people were killed. Gulen denies the allegation.

Turkey, home to the Incirlik air base which is used by U.S. forces in the Middle East, has been a NATO member since the 1950s and a close ally of the United States.


(Reporting by Lisa Lambert; Additional reporting by Yara Bayoumy and Susan Heavey; Writing by Alistair Bell; Editing by Frances Kerry)