Turkey increases tariffs on some US imports in retaliation for ‘economic attacks’

Turkey said on Wednesday it would increase tariffs on imports of certain US products, including rice, cars, alcohol and coal – escalating a feud with the United States that has helped trigger a currency crisis.

The Turkish government said tariffs on American cars will be doubled to 120 per cent while those on alcoholic drinks will be hiked by the same rate to 140 per cent. Overall, the duties will amount to US$533 million, a relatively small sum that is unlikely to hurt US companies much and appears meant instead to make a political point.

Vice-President Fuat Oktay said on Twitter that the tariffs on certain products were increased “within he framework of the principle of reciprocity in retaliation for the deliberate economic attacks by the United States”.

The tariffs came a day after President Recep Tayyip Erdogan said Turkey would boycott US electronic goods, singling out iPhones. He suggested Turks would buy local or Korean phones instead, though it was unclear how the boycott would be enforced or encouraged.

Apple has 22 per cent of the smartphone market in Turkey, where 11.4 million units were sold last year, according to Ramazan Yavuz, research manager at IDC consultancy company.

Although preference for Apple products is strong, their already high prices are curbing demand, Yavuz said adding that the boycott “is expected to reduce Apple’s performance in the country in the upcoming quarters”.

The Turkish lira has dropped to record lows in recent weeks, having fallen some 42 per cent so far this year. It recovered a bit, by 4 per cent to around 6.12 lira per dollar Wednesday, after the government took steps to shore up the currency by reducing the daily limit in bank foreign currency swap transactions.

Also helping was Turkey’s decision to release two Greek soldiers from prison on Tuesday, increasing prospects for improved relations with the European Union.