The Turkish lira plunged 20% Friday after President Trump announced he would be doubling the import tariff on metal produced in that country, sending Turkey's currency to a record low against the U.S. dollar. It followed a deepening rift with the United States, worries about its own economy and lack of action from policymakers. That turned into a rout on Friday.
The announcement came as Erdogan had already been forced to dismiss concerns over Turkey's plunging lira after the currency hit record lows overnight on the back of the widening rift with the US.
Reverberations spread through global markets, with European stockmarkets especially hit as investors took fright over banks' exposure to Turkey. "There was widespread selling in the country's bond markets and Istanbul stocks dropped 1 percent too", adds Kucukgocmen.
Friday saw the lira's value falling over 15 percent, bringing the decline to over 40 percent since the beginning of the year.
Trump announced the doubling of aluminum and steel tariffs in a tweet Friday, citing bilateral strains.
In refusing to change course in his economic plan, "the Turkish president has chose to play a game of chicken with the worldwide financial markets", said Aaron Stein, a Turkey expert and senior fellow at the Atlantic Council, a think tank in Washington.
"In that sense, the Turkey situation can be a contagion not only in Europe but across emerging markets", Anderson said.
"Don't forget", he said, "if they have their dollars, we have our people, our God".
"Aluminum will now be 20% and Steel 50%". This is a national struggle.
But Turkey's trade ministry said the tariffs were against World Trade Organisation rules.
Turkey, a North Atlantic Treaty Organisation ally, him on trial for espionage and terror-related charges linked to a failed coup attempt in the country two years ago.
A diplomatic source, however, familiar with talks of Turkish deputy foreign minister Sedat Onal in Washington this week, told The National that exchanging Mr Brunson for Mr Atilla is not on the table from the USA side.
Meanwhile, investors are anxious about the economic policies of President Recep Tayyip Erdogan, who won a new term in office in June with sweeping new powers.
Turkey's ever combative President Recep Tayyip Erdogan vowed to not bow to economic pressure.
If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks.
Turkish newspaper Hurriyet and other media reports quote Erdogan as making the comment to a group of worshippers following traditional Muslim Friday prayers during a visit to the northern city of Bayburt. "Relations with countries who behave like this have reached a point beyond salvaging", said Erdogan, who warned of "economic war".
The U.S. decision is another salvo in the growing dispute between Turkey and the U.S. It is host to an X-band radar, a critical part of the Western alliance's missile defense system again Iran. "Section 232 tariffs are imposed on imports from particular countries whose exports threaten to impair national security as defined in Section 232, independent of negotiations on trade or any other matter".
"If they have their dollar, we have the people, we have Allah", he said, as the lira continued to fall.
The Trump administration was expecting the release of Mr Brunson on July 18, the day of his appearance in court, but instead the ruling kept him in jail till his next hearing in October.
Trump noted on Twitter that the lira "slides rapidly downward against our very strong Dollar!"
While the lira's plunge could drag down the Turkish economy, the impact on euro zone banks in general is seen as modest, economists said. Gulen denies the allegation.
Brunson was arrested in 2016 on charges that he had participated in a failed military coup against Erdogan, and had colluded with Kurdish militants.