Trump adds Turkey to his trade wars

Donald Trump is widening his use of tariff threats and imposition of ad hoc tariffs. now targeting Turkey.

Given Trump’s record of withdrawing from or attempting to renegotiate trade agreements, and his spraying around of tariff threats and the ad hoc imposition of tariffs, it will be difficult for the world of trade to have any certainty in what the US may do in the future.

Businesses tend to hate this sort of uncertainty.

Trump is not just using trade weapons to try to drive more favourable deals for the US, he is using them as a punishment.

Washington Post: Trump takes aim at Turkey, announcing doubling of steel and aluminum tariffs in effort to punish country

Turkish President Recep Tayyip Erdogan warned Friday against those who try to “bully” his country, as an announcement by President Trump imposing new tariffs on Turkey sent its currency into free fall.

“The language of threats and blackmail cannot be used against this nation,” Erdogan said in apparent response to Trump’s early-morning tweet saying he was doubling existing U.S. import levies on Turkish steel and aluminum. “Those who assume they can bring us to our knees through economic manipulations don’t know our nation at all,” he said, without directly mentioning Trump or the tariffs.

But the U.S. announcement quickly sent the value of the Turkish lira, already under severe strain, to a record low against the U.S. dollar. The currency crisis has fueled growing concerns in the international financial community and among investors about the health of the Turkish economy.

Trump’s willingness to ratchet up the financial pain on Turkey followed an unsuccessful effort this week to resolve the ongoing dispute between the two countries over Andrew Brunson, an American pastor held on charges that include espionage and trying to overthrow the government.

This seems to be just how trump does things. For Trump, sanctions substitute for foreign policy

For all the talk of “fire and fury” we once heard from President Trump, his administration’s most-frequently used weapons have been not have been explosive — they’ve been financial.

Since entering office, Trump has often used economic sanctions (and, concurrently, tariffs) in an attempt to bend other countries to his will. The administration feels, with some justification, that tough sanctions brought North Korea to the negotiating table.

Now Trump hopes that reinstating sanctions on Iran will also force that country to bargain with the United States and craft a new nuclear deal.

But the evidence that these sanctions are working as a foreign-policy tool isn’t convincing. And there is considerable concern that the Trump administration is overusing them while neglecting other important facets of foreign policy, like simple negotiations or coordination with allies.

The Washington Post’s Carol Morello recently outlined just how prevalent sanctions have become in the Trump era in a recent article. She found that during just one month — February 2018 — the United States had imposed sanctions not only on North Korea, but also groups or individuals in Colombia, Libya, Congo, Pakistan, Somalia, the Philippines, Lebanon and more.

Though their use may be increasing, sanctions are not a new idea — they date back hundreds of years, if not further. Yet academic research has found that they often don’t work as intended. One study looked at 200 sanctions from between 1914 and 2008 and found only 13 that were clearly instrumental in achieving their creators’ aims.

The problem isn’t necessarily that they can’t inflict financial damage on a foe (given the power the United States holds over the global economy, that much is now a given). Instead, the issue is that this damage doesn’t always contribute to any logical foreign policy goal.

Using tariffs and sanctions is a heavy handed way of trying to get what Trump wants – there may be some successes in the short term, but damaging the finances of countries can have much wider effects (like for international investors and those who trade with the targeted country).

And Trump risks burning a lot of diplomatic bridges. Establishing a record of mistrust and unreliability may end up biting the United States on the bum.

 

Leave a comment

19 Comments

  1. Alan Wilkinson

     /  August 12, 2018

    It’s just Trump’s version of gunboat diplomacy. Piss us off and we’ll beat you up economically. I don’t think it adds any uncertainty compared with talk but no action or sending in the drones.

    Reply
    • Gezza

       /  August 12, 2018

      Making America Gate Again, tho.
      Will be interesting to see if & how it ultimately changes the economic order which the US dominates.

      Reply
    • Blazer

       /  August 12, 2018

      last door on the…right Al..

      Reply
  2. Blazer

     /  August 12, 2018

    yes Yankee Go Home will reverberate around the world…amplified.

    Al go back and watch the 2 min clip I put up the other day…that’s the M.O.

    Reply
    • Alan Wilkinson

       /  August 12, 2018

      No, I’m still waiting for the Guatemalan economy to stop growing so fast and collapse on account of the evil capitalist agenda you promised, B.

      Reply
      • Blazer

         /  August 12, 2018

        Why do you have shares in a confiscated banana plantation?

        You cannot deny the logic of that clip…the guy who made it was an insider.

        Capitalism and money supply is predicated on infinite ‘growth’ otherwise it collapses.

        You must feed the voracious compounding debt master….till you..die.

        Reply
        • Alan Wilkinson

           /  August 12, 2018

          I’ve pointed out before there are effectively no finite limits to growth because the universe has enormous energy resources.

          The clip obsesses about one small factor amongst a myriad of others mostly much more important. As do you.

          Reply
          • Blazer

             /  August 12, 2018

            what ‘small’ factor did the clip ‘obsess’ over?Love to know.

            I strongly disagree that relevant growth is infinite.

            Reply
            • Alan Wilkinson

               /  August 12, 2018

              Banking, like you.

              I don’t care whether you disagree re growth. The facts are as I have stated them.

            • Blazer

               /  August 12, 2018

              gee Al ,Perkins worked for the deep state ,worked with the IMF,AND YOU’RE TELLING ME HE DOESN’T UNDERSTAND BANKING!

              and YOU DO!!…preposterous.

            • Alan Wilkinson

               /  August 12, 2018

              No, I’m telling you he obsesses over it to the exclusion of most else.

            • Blazer

               /  August 12, 2018

              its all about $$$$$$$$$$$$$$$$$$…your obsession too,but you don’t understand the implications…hint=TAX.

      • Alan Wilkinson

         /  August 12, 2018

        Columbian, not Guatemalan.

        Reply
  3. Reply
    • Kitty Catkin

       /  August 12, 2018

      I didn’t see that coming.

      If the house was insured for enough to rebuild it as it was before, but materials have gone up 20% (or whatever it is) the insurance will only cover 80% (?) so the people will have a smaller house or one made of less good material.

      This will affect the resale price, horrid thought.

      So the people could well be in negative equity.

      Reply
  4. David

     /  August 12, 2018

    Pompeo, Pence, Trump and the whole state department have been pushing Turkey to either allow the Pastor home or put him on trial, Turkey are using him as a bargaining chip to get back a Turk in the US they think encouraged the coup.
    There is background and nuance to this and the US is applying pressure after diplomacy failed. Turkey played chicken and they are going to get plucked.
    Trump has been very effective at bringing home prisoners its obviously something he feels passionate about.

    Reply
    • Kitty Catkin

       /  August 12, 2018

      What odd names some Americans have.

      Trump, which is an English dialect for a fart, seems an odd choice for someone anglicising their name.

      Reply
    • Blazer

       /  August 13, 2018

      Reply

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