Turkey’s president vows to boycott iPhones amid currency crisis triggered by U.S. dispute

Turkish President Recep Tayyip Erdogan vowed to boycott American electronics, including Apple Inc.’s iPhone, as he retaliates against Donald Trump’s attempts to isolate his economy.

After the U.S. 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.

“There is a cost for those who are plotting the operation” against Turkey, he said in televised remarks from Ankara, without specifying when the boycott would start or how it would be enforced. “If they’ve got iPhone, there is Samsung on the other side. In our country, there is Venus Vestel,” he said, referring to a Turkish-made smartphone.

While the economic penalties would probably do little to dent U.S. economic interests, Erdogan’s threat shows that the standoff over the fate of an American pastor held in Turkey isn’t going to end soon. The move is reminiscent of steps by President Vladimir Putin to ban food imports from countries that slapped sanctions on Russia in 2014 over its annexation of Crimea.

The difference is that unlike Russia, the U.S. and Turkey are NATO members. Erdogan warned that the U.S. is putting decades-old alliances at risk and pushing Turkey to seek allies elsewhere.

The lira rallied for the first time in a week nonetheless. Two Turkish business lobbies and the heads of two banks increased pressure on the government and central bank to act to stem a slide that saw the lira lose more than a quarter of its value in less than two weeks. It rose 5.1 per cent to 6.5530 per dollar by 1:31 p.m. in Istanbul.

Turkey’s President Recep Tayyip Erdogan gestures prior to delivering a speech in Ankara, Turkey, Tuesday, Aug. 14, 2018. Erdogan said his country will boycott U.S.-made electronic goods amid a diplomatic spat that has helped trigger a Turkish currency crisis.

The Union of Chambers and Commodities Exchanges of Turkey and the Turkish Industry and Business Association called on the government to cut spending, improve ties with the European Union and bring to an end the spat with the U.S.

Policy makers need to adopt a series of measures “so that the situation doesn’t make permanent damage to the real economy,” the Union of Chambers and Commodities Exchanges of Turkey and the Turkish Industry and business Association said in a joint statement. “Businesses are determined to provide support for success of the economy’s government program.”

While Erdogan didn’t address their concerns in his speech, he said Turks have already begun converting foreign exchange into Turkish lira because it would be tantamount to “surrendering” if they did otherwise.

Below are the highlights of Erdogan’s speech in Ankara:

Turkey is facing a clear economic attack; the nation’s banks are better capitalized than counterparts anywhere around the world and there isn’t anything that could justify the swift depreciation in the lira.

Turkey has economic problems that it should take notice of and fix such as a wide current-account deficit and high consumer inflation rate.

Enmity towards Turkey stems from the fact that Turkey has been growing fast and now stands as the world’s 13th largest economic by purchasing power.

It’s unclear what the U.S. trying to achieve by targeting an ally with whom it worked together in places including Somalia, Afghanistan and Kosovo.


+ 0 -
The latest news and information from the world of finance