Erdogan meets Trump’s challenge
Turkish President Recep Tayyip Erdogan announced Ankara's intention to switch to the national currency payments in relations with the leading trade partners. According to Erdogan, the main partners are Russia, China, Iran and Ukraine. Erdogan's plans became a response to the US actions -an increase of the tariffs on the steel and aluminium imported from Turkey. Washington's actions caused a record drop of the Turkish lira’s value.
Moreover, a new wave of sanctions imposed on the initiative of US President Donald Trump against Moscow has already responded with the ruble’s drop - it is predicted, that the Russian currency’s value will reduce to 70 per dollar. The fall of both lira and ruble immediately affected the US strategic partner -Georgia, not related to the US-Turkish and US-Russian political exacerbations, but dependent on the Turkish and Russian economies and markets. By the end of the previous week, the residents of this country were unpleasantly struck by the devaluation of the national currency by almost 10 points in some 2-3 hours (and this happened amid an unprecedented influx of tourists, and, therefore, of currency). At first, the local experts could not tell anything sensible.
While Moscow was pondering or pausing before the announcement of the countermeasures, Erdogan said that if the European countries also want to get rid of the dollar’s dictate, Turkey can change the payment system with them as well. The Turkish leader is extremely rigid: Ankara will not reconcile with the world order, where there is an ongoing economic war, and sanctions are imposed on various states. ‘’Such actions against Turkey will not lead to anything, but will only provoke our retaliatory actions. I openly declare: Turkey will not change its policy on Syria and Iraq,’’ Erdogan said.
As everyone knows, Washington imposed sanctions against a number of high-ranking Turkish officials due to pastor Andrew Brunson’s arrest, who was detained in Turkey in October 2016 and charged with links to the oppositional Islamic preacher Fethullah Gülen and his organization FETO, which is considered terrorist in Turkey, as well as aiding the Kurdistan Workers' Party (PKK) outlawed in Ankara as a terrorist organization. Brunson categorically denies these allegations. After Ankara's refusal to release Brunson, Washington stroke a direct blow to the Turkish economy - doubled the tariffs on aluminum and steel. The national currency could not stand such development and collapse to a record low: almost 6.5 liras per dollar.
Commenting on this decision, Trump wrote in Twitter: "I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50% ".
Erdogan responded by calling Turks not to panic, as ‘Allah is with us’, and change dollars to liras.
In the conflict between the two countries, Russia, which concluded with Turkey an agreement on the supply of the S-400 anti-aircraft missile systems, also made a ‘preventive’ contribution. The US offered Turkey to refuse these purchases, and Ankara, in turn, invited Washington to work together to study the implications of deploying these systems and to ensure their safety for the NATO aircraft. Trump attempted to persuade Erdogan and ‘foist’ him the Patriot air surface-to-air missile systems, though the former administration of the White House was against it. But Turkey decided not to change its course - the supply of Russian systems is necessary to protect airspace from terrorist missiles launched by militants from Syria's controlled areas. In general, Trump failed to make a counter-deal, which of course, was particularly painful for self-centered president-businessman.
Today, Ankara accuses Washington of violating the WTO rules. The Ministry of Trade of Turkey made the following statement. "Turkey, which acts in accordance with these rules in its trade policy, expects the same respect for them from other countries. We will continue to support and protect our steel and aluminum exporters against the illegal actions on the international platforms, including the WTO. The US remains, as before, an important trade partner of Turkey, "the statement reads.
The official statements of the two countries entered into conflict repeat the history of the distant 1960s. On February 4, 1965, French President Charles de Gaulle announced that he considered it necessary to establish the international exchange on an indisputable basis of the gold standard. He stroke a blow to the Bretton Woods system of the international monetary management, facing the overwhelming contradictions with the leaders of the Anglo-Saxon world. At the subsequent meeting with US President Lyndon Johnson, de Gaulle said he wanted to exchange one and a half billion paper dollars for gold at the official exchange rate: $ 35 per ounce. Soon Johnson was informed that the French ship, laden with ‘green wrappers’ (de Gaulle's definition), was in the New York port, and the French plane with the same luggage had already landed at the airport. Johnson promised the French president serious problems. De Gaulle responded with the withdrawal of the NATO headquarters, 29 NATO and US military bases from France, and received more than 3,000 tons of gold for American paper money. De Gaulle’s successful operation did not leave other countries indifferent. Following France, Germany began to collect dollars on its remaining territory to exchange them for gold. In 1971, the US was forced to officially cancel the gold security of the dollar, and then devalue it.
The story, of course, will not be repeated in exactly the same way. The Turkish-American spat is about the same as the American-French one, but the tools for its resolution differ. Then Charles de Gaulle remained in general alone and was forced to resign amid the student riots, the nature of which has no unambiguous explanation to this day. Today we can say that Erdogan meets Trump's challenge and is ready to respond as much as he is able with the help of the maximum number of allies, who are fed up with American pressure on the slightest occasion.