The lira's plunge yesterday is one of the most serious economic crises that Erdogan has faced since coming to power in 2003 in the wake of a financial crisis in 2001 that brought the economy to near meltdown.
On Friday, Turkey's currency, the Lira, fell as much as 14%, causing the global financial markets to shudder.
UBS chief economist for EMEA emerging markets Gyorgy Kovacs said a giant rate hike of 350-400 basis points would be "consistent with real rate levels that in the past helped to stabilise the currency" but warned a deal to normalise ties with the United States may also be needed.
Trump added that the Turkish currency Lira "slides rapidly downward against our very strong Dollar!" At the same time, the US froze the sale of 100 F-35s to Turkey, despite their co-operation for their manufacturing and production since 2008. The debt problem in Turkey is also a bad omen, and could pressure other emerging markets.
The tariff for steel imported from Turkey will now be 50 percent. But this seems less likely as Erdogan and his mouthpieces in the media cast the United States' moves as some kind of epic battle to wreck Turkey, and Trump just gave them fresh ammunition. He said this during a speech in the town of Unye (Turkey). In the past, Trump has threatened to impose trade barriers on countries that deliberately push down the value of their currencies, so as to make their goods cheaper for American consumers (and thus, more competitive than the wares of US manufacturers). According to figures from the Turkish Government, for the period of 2002 to October 2017, Turkish direct investments in the United States reached $3.7 billion while US investments in Turkey amounted to $11.1 billion, second only to the Netherlands' 21.6 billion.
Brunson is now on trial in Turkey for espionage and terror-related charges linked to a failed coup attempt in the country two years ago. You are exchanging your strategic partner in North Atlantic Treaty Organisation for a priest.
Erdogan has further attempted to bolster the nation against this "economic war", calling for citizens to exchange foreign currency and gold for lira as part of the "domestic and national struggle".
Turkey has since accused Mr Trump of enforcing "economic terror" on the troubled nation.
"The U.S. runs the risk of losing Turkey as a whole".
Mr. Erdogan says the coup was orchestrated from the United States, and specifically by a Muslim cleric, Fethullah Gulen, from his self-imposed exile in Pennsylvania.
Jay Sekulow, an attorney for Trump who is also representing Brunson's family, told talk-show host and political commentator Sean Hannity's radio program on Friday: "We're close to getting a resolution in that case".