Turkey’s president has pledged to defy what he describes US attempts to weaken his country’s economy, rallying supporters a day after Washington imposed even higher tariffs on Turkish metals – and sent the lira tumbling.
The two NATO allies remain at loggerheads over multiple issues ranging from diverging interests in Syria to Ankara’s expressed desire in purchasing Russia’s S400 anti-missile system, as well as the lingering case of an Evangelical pastor who is on trial in Turkey on terrorism charges.
Amid the worsening relations, the Turkish lira has lost more than 30 percent of its value against the US dollar since the start of the year. On Friday, US President Donald Trump’s decision to double steel and aluminum tariffs on Turkey sent the lira into another dive, falling as much as 18.5 per cent at one point.
Speaking on Saturday in the northeastern Turkish province of Rize, President Recep Tayyip Erdogan said the US would pay a price by challenging Turkey for the sake of “petty calculations”, denouncing Washington for declaring “economic war on the entire world” and holding countries “for ransom through sanction threats”.
WATCH: Erdogan says Turkey economy under attack as Trump doubles tariffs
He also described dollars, euros and gold as “the bullets, cannonballs and missiles of the economic war being waged against our country”.
“Those who can’t compete with us on the ground have brought online fictional currency plots that have nothing to do with the realities of our country, production and real economy,” Erdogan added.
“The country is neither crumbling nor being destroyed or bankrupt or in a crisis,” adding that the way out of the “currency plot” was to boost production and minimise interest rates.
Erdogan is a self-described “enemy of interest rates” and wants cheap credit from banks to fuel growth.
Investors however fear the economy is overheating and could be set for a hard landing, while concerns over the dispute with the US have also hit Turkish stocks. The lira’s fall meanwhile has raised concerns in the European Union about the exposure of some the bloc’s biggest banks to Turkey.
“There is a currency crisis, kind of promoted by the geopolitical risks, and which is obviously used by the American foreign policy decision-makers,” Selva Tor, a financial security analyst, told Al Jazeera.
Ankara’s delicate relations with the US soured further following the arrest of pastor Andrew Brunson in 2016 on charges of “committing crimes on behalf of terror groups without being a member” and espionage.
WATCH: US sanctions two Turkey officials over detention of pastor
Brunson served as pastor of Izmir Resurrection Church, a small Protestant congregation, and has lived in Turkey for more than 20 years. He was detained by Turkish forces in the aftermath of a failed coup blamed by Ankara on Fethullah Gulen, a religious leader living in self-imposed exile in the United States. Gulen has denied any involvement.
Trump has described Brunson’s detention as a “total disgrace” and urged Erdogan to free him “immediately”. The Christian right, an important component of Trump and Vice President Mike Pence’s voting base, has been pressuring the administration on the Brunson case.
But in a New York Times opinion piece published on Saturday, Erdogan cautioned against pressuring his administration into meddling with the judicial process.
“Attempting to force my government to intervene in the judicial process is not in line with our constitution or our shared democratic values.”
Partnership in ‘jeopardy’
He also said that his country’s partnership with the US is in jeopardy, warning that Ankara may start looking for new allies.
In Rize, Erdogan said Turkey had alternatives “from Iran, to Russia, to China and some European countries”.
Meanwhile, Iran’s Foreign Minister Mohammad Javad Zarif waded into the intensifying dispute, accusing the US of an “addiction to sanctions and bullying”.
“The US has to rehabilitate its addiction to sanctions [and] bullying or the entire world will unite – beyond verbal condemnations – to force it to,” he warned.
“We’ve stood with neighbours before and will again now.”
Analysts believe that another factor in the growing disagreement between Turkey and the US is Ankara’s unwillingness to join recent sanctions against Tehran in the wake of Washington’s withdrawal from the 2015 Iran nuclear deal.
Turkey is a buyer of energy from Iran, as well as from Russia and Azerbaijan.
WATCH: Inside Story – Is the US-Turkey crisis beyond repair?