Turkish assets are breathing a sigh of relief after tariffs threatened by US President Donald Trump over Ankara’s military offensive in Syria came up less serious than markets had expected, CNBC reported.
Turkey’s lira rose in Tuesday morning trading on the back of a statement by Trump promising a 50 percent tariff on Turkish steel imports and a halt to trade negotiations between Ankara and Washington — penalties that analysts are calling “window dressing.”
The dollar was down 1 percent against the lira for the session, with the Turkish currency trading at 5.8628 per dollar at 8 a.m. London time on Tuesday.
The tariff threats are mere “window dressing from Trump,” said Timothy Ash, senior emerging markets strategist at Bluebay Asset Management. “Minimal sanctions. A few individuals. A trade deal which was years off anyway. And steel tariffs up to 50% — Turkey hardly exports any (steel to the U.S.) anyway,” Ash said in an emailed note.
The lira was labeled the world’s worst performing major currency in the second week of October as sanctions stress weighed on Turkish assets. Trump has been threatening to “totally obliterate” Turkey’s fragile economy over President Recep Tayyip Erdoğan’s military offensive into northern Syria against US-backed Kurdish forces — an operation Trump essentially greenlighted with his shock announcement to withdraw US troops from the area and hand responsibility for dealing with remaining Islamic State IN Iraq and the Levant (ISIL) fighters to the Turks.
“These appear to be relatively light sanctions — meant to appease Congress without sundering Trump’s relations with Erdoğan,” Charlie Roberston, global chief economist at Renaissance Capital, told CNBC.