Turkey's president threatens boycott of iPhones, other United States electronics

Wall Street

President Recep Tayyip Erdogan announced Turkey's latest salvo Tuesday, saying his country will boycott US -made electronic goods and turn to other manufacturers including South Korea's Samsung or Turkey's Vestel.

After the US imposed sanctions on two Turkish ministers and amid growing domestic pressure from businesses and banks to contain a currency crisis, Erdogan said he wouldn't back down in the face of the economic attack against his country.

"If [the US] has the iPhone, there's Samsung on the other side", Mr Erdogan said, referring to Apple and its South Korean competitor.

"We (also) have our Venus and Vestel", he said about homegrown Turkish electronics brands.

The lira's crash, which saw it fall to a record 7.24 to the dollar early on Monday morning before recovering to 6.35 on Tuesday, prompted concerns that the economy, which is heavily reliant on foreign currency loans, could slide into turmoil.

During his speech, Erdogan singled out the iPhone as a notable American import.

On August 10, US President Donald Trump announced higher tariffs on Turkish imports of steel and aluminum.

Turkey and the USA also disagree over their military interventions in the Syria war, Ankara's plan to buy missile defense systems from Russian Federation and the U.S. conviction of a Turkish state bank executive on sanctions-busting charges in January.


"They do not hesitate to use the economy as a weapon against us, as they [also] tried in the diplomatic or military field, and efforts to sow social and political instability", Erdogan added. He added that US electronics would have sanctions placed on them.

Erdogan admitted the Turkish economy had problems - including a widening current account deficit and inflation of nearly 16 percent but added: "Thanks to God, our economy is functioning like clockwork". Independent economists say Erdogan should let the central bank raise interest rates to support the currency, but he wants low rates to keep the economic growth going. On Tuesday Turkey announced a boycott on USA electronics in response.

Turkey has held Christian pastor Andrew Brunson in custody for almost two years on espionage and terrorism charges tied to an attempted coup of Erdogan in 2016.

"Turkish banks get loans from the foreign market and sell on the Turkish market so a huge depreciation in the lira puts their balance sheets under pressure", said Can Selcuki, general manager and partner at Istanbul Economics Research. Even more, Trump's direct reference to the Turkish lira sent the currency tumbling.

The tough message emerged a day after White House national security adviser John Bolton met privately with Turkish ambassador Serdar Kilic about the case of evangelical pastor Andrew Brunson.

The Turkish lira has lost more than 40 percent of its value.

Tisdall thinks Erdogan's arrogant style and dictatorial ambitions have backed him into a corner because he can not blame anyone else for Turkey's sputtering economy and souring worldwide relations.

On Monday, Erdogan criticized his American counterpart, saying Washington was seeking to stab Turkey "in the back".

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