Turkey said Wednesday it is increasing tariffs on some US products like cars, alcohol, and coal—a move that is unlikely to have much economic impact but highlights the deteriorating relations with the US in a feud that has already helped trigger a currency crisis. The Turkish government said tariffs on American cars will be doubled to 120% while those on alcoholic drinks will be hiked by the same rate to 140%, the AP reports. Overall, the duties will amount to $533 million, a relatively small sum meant as retaliation for US President Donald Trump's recent decision to double tariffs on Turkish steel and aluminum. The tariffs also come a day after President Recep Tayyip Erdogan said Turkey would boycott US electronic goods, singling out iPhones. It was unclear how the boycott would be enforced or encouraged.
Beyond the bluster of the two world leaders, the spat between the NATO allies has exacerbated a financial storm in Turkey. International investors have been put off by the country's high levels of foreign debt and Erdogan's refusal to allow the central bank to raise interest rates to support the currency, as experts say it should. The currency drop is particularly painful for Turkey because it has accumulated a high debt in foreign currencies. The Turkish lira has dropped to a series of record lows in recent weeks, having fallen 37% so far this year. It recovered a bit, by 5% to around 6.05 lira per dollar Wednesday, after the government took steps to shore up the currency by reducing the daily limit in bank foreign currency swap transactions. As for the tariff move, analysts say it's unlikely to cause serious pain, with one calling it a "symbolic gesture." (Read more Turkey stories.)