Turkey releases Greek soldiers as it slaps 140% tariff on American alcohol

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The tariff increases followed Donald Trump's decision last week to double United States tariffs on Turkish steel and aluminium, deepening Turkey's economic crisis.

The Turkish currency has lost almost 40 percent against the dollar this year, driven by worries over Erdogan's growing influence on the economy and his repeated calls for lower interest rates despite high inflation. The United States was the fourth-largest source of imports to Turkey past year, accounting for $12 billion of imports, according to International Monetary Fund statistics. "We have other partners and alternative markets".

Turkey entered into an understanding to the Russian defense system despite being a North Atlantic Treaty Organisation ally, and has been increasingly cozying up to Russian President Vladimir Putin, alarming both the United States and EU.

The offer came after Turkish president Recep Tayyip Erdogan hosted the emir of the gulf state on Wednesday.

At any rate, it's not clear how Erdogan plans to enforce this boycott if indeed he intends to enforce it at all.

The row with Washington has helped drive the lira TRYTOM=D3 to record lows, with the currency losing more than 40 percent of its value against the dollar this year, prompting central bank liquidity moves to support it.

The US dollar index spot rate has risen to 96.842, its highest level in over a year amid the Turkish lira crisis.

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

Fundamental concerns about the economy persist, however.

"It was important to do it because the WTO goes to meetings twice per month, if we couldn't complete it, we will wait more 15 days". That fueled a relatively high rate of economic growth-7 percent past year.

Attention will turn Thursday to an address by the finance minister to foreign investors for clues on any change in economic policy.

President Trump has since intervened and called for the pastor's immediate release.

Jameel Ahmad, global head of currency strategy and market research at FXTM, said the escalation of both diplomatic and trade tensions between the U.S. and Turkey has reminded investors that it is not just the USA and China that stand at the heart of the global trade war concerns.

Erdogan has rejected Washington's demands to release him, while announcing new tariffs on US imports.

Meanwhile, Turkey has also decided reject a US appeal calling for the release of an imprisoned American pastor.

The United States sanctioned Justice Minister Abdulhamit Gul and Interior Minister Suleyman Soylu, blaming both for being involved Brunson's arrest and detention.

"Erdoğan has stated in the past that Brunson's arrest was meant to allow Ankara to trade" him for extraditing Gülen, who lives in Pennsylvania. Strangely, the Trump regime has sometimes been at odds with the positions of its own State Department, most notably on issues like Russian election interference.

The lira firmed as far as 5.75 against the dollar on Wednesday and stood at 5.90 at 2058 GMT.

The two countries have also been in conflict in Syria's war. The country has also called for a ban on US electronics. Ankara has other countries to make alliances with.