Trump doubles steel and aluminium tariffs on Turkey as lira nosedives

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President Donald Trump announced Friday that he plans to double steel and aluminum tariffs on Turkey - prompting the lira to plunge 20 percent - amid heightened tensions between the two North Atlantic Treaty Organisation allies.

The White house said he had authorised the move under Section 232 of USA trade law, which allows for tariffs on national security grounds.

Turkey is now under a 25 percent tariff on imported steel and 10 percent on aluminum, which went into effect in March. Washington slapped tariffs of 25 percent on steel and 10 percent on aluminum in March for imports from several countries, including Turkey.

The lira dropped 11 percent against the USA dollar Friday as Turkish President Recep Erdogan warned of a global economic war against his country.

The lira was buffeted by a diplomatic row between Ankara and Washington, with Turkish President Tayyip Erdogan's attempts to talk up the currency having exactly the opposite effect.

The Turkish lira plunged on Friday, raising questions about the country's financial stability, as investors anxious about the president's unorthodox economic policies and a dispute with the United States that has led to sanctions.

Erdogan, whose typical defiance in the face of the crisis has further unnerved investors, appealed to Turks' patriotism and urged support for their free-falling currency.

He repeated a line from his earlier speech in which he said: "If there is anyone among you who has gold, dollar, euros under your pillows, you should take it to banks and sell for liras".

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Erdogan appeared to blame foreigners for trying to hurt Turkey, "This will be my people's response against those waging an economic war against us", he said.

A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018.

"Don't forget, if they have their dollars, we have our people, our God".

Ankara and Washington have been at loggerheads over the detention of Brunson on terrorism charges, earlier prompting United States sanctions against two of Erdogan's ministers and threats of trade restrictions. Turkey's currency sagged to an all-time low Friday amid doubts about the country's economic management and souring ties with the United States. As the currency drops, Turkish companies and households with debt in foreign currencies see their debts expand.

Finance Minister Berat Albayrak is due to announce the government's latest plan for the economy at a press conference at 11:30 GMT.

'The price of the food that I buy increases day by day, the fuel that I put in my auto to distribute lunches is more expensive, but I can not raise my prices from one day to the next, ' she said.

The currency extended its losses to trade at 6.2 to the dollar, a loss of 11.5 percent on the day.