President Donald J Trump tweeted on Friday that “Our relations with Turkey are not good at this time!” adding that he had “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%,” President Trump wrote.
Breitbart The currency has already fallen 36 percent in 2018 and has slid against the dollar on Friday.
Also on Friday, relations between the United States and Turkey have worsened over the fundamentalist Muslim-majority country’s detention of American pastor Andrew Brunson, who was arrested by authorities during a post-military coup attempt in 2016.
The Single Supervisory Mechanism, the European Central Bank’s financial watchdog, has become concerned about the knock-on effects that the fall of the Turkish lira will have on some of Turkey’s European lenders after it experienced one of the biggest one-day falls of any free-floating currency in 20 years.
The panic has prompted investors to dump eurozone bank shares, with BBVA, UniCredit, and BNP, which have significant operations in Turkey, the worst effected. Shares in Spain’s BBVA were down 5.7 percent late on Friday, Italy’s UniCredit off 6.4 percent, and France’s BNP Paribas dropping 4.4 percent, all exceeding a 4.3 percent drop in the euro zone bank index, according to Reuters.
The ECB is concerned that the contagion will result in Turkish borrowers defaulting on foreign currency loans, which make up about 40 percent of the Turkish banking sector’s assets, according to the Financial Times.
If Turkey makes good on this threat, it could be a declaration of war:
Turkish Lawyers Demand Raid On Incirlik (US) Air Base in Turkey And Arrest Of U.S. Military Personnel The claims stem from the 2016 coup plot and could help push the US to curb operations at the base and withdraw its nuclear stockpiles there.(h/t Tim W)