- Goldman is slashing employee pay as it ramps up new tech ventures like the Apple Card
- Trump is saying Turkey ships a lot of steel to the United States. It doesn't
- The 'Big Four' banks have now reported, and one looks poised for a breakout, charts suggest
- 'Start Here': Democrats walk out of Syria meeting with Trump
- Brexit deal clinched in Brussels, Johnson still needs backing at home
U.S President Donald Trump (R) and President of Turkey Recep Tayyip Erdogan (L) shake hands during a meeting at the Oval Office of the White House in Washington D.C., United States on May 16, 2017.
Kayhan Ozer | Anadolu Agency | Getty Images
President Donald Trump is defending his sanctions and tariffs on Turkey in the face of criticism that the measures — intended to deter Turkey from continuing its expanding military offensive against U.S-allied Kurds in northern Syria — are too soft.
Trump says that his penalties, which include sanctions on individual ministers and a 50% tariff on Turkish steel exports to the U.S., are the “strongest you can imagine.”
He told media on Tuesday that “We’re being very tough on Turkey and a lot of others … we’re asking for a cease-fire, we put the strongest sanctions that you can imagine … including massive tariffs on steel, they ship a lot of steel to the U.S., they make a lot of money shipping steel, they won’t be making so much money.”
Trade figures contradict Trump’s claim that the measures are a massive economic hit for Turkey. According to U.S. government statistics, Turkish steel exports to the U.S. have dropped dramatically in recent years, meaning that taxing them more highly will likely have a minimal impact on Turkey’s economy.
“Just 0.5% of Turkish exports were steel sales to the U.S. in 2018,” Charlie Robertson, global chief economist at Renaissance Capital, told CNBC. “Turkey won’t allow its sovereignty to be undermined by the U.S. refusing to buy the steel, which Turkey can sell elsewhere.”
“Trump may be exaggerating the importance to deflect criticism.”
Turkey ranks 19th in the list of steel importers to the U.S. by volume, comprising 1.1% of all steel bought by the country this year. Between 2018 and 2019, the volume of Turkish steel exports to the states plummeted by 76%, after already falling by 38% from 2017 to 2018.
Much of the fall last year was on the back of temporary 50% steel tariffs issued over the Turkish detention of Andrew Brunson, an American pastor accused of involvement in Turkey’s 2016 attempted coup. The Trump administration cut the tariffs down to 25% last May.
In the first eight months of this year, Turkey’s steel exports to the U.S. sat at $120 million — a nearly 20-year low.
Turkey’s lira actually rose on Tuesday after the tariffs Trump had threatened came up less serious than markets had expected.
‘More for show than effect’
“This is a fraction of U.S. steel consumption and imports, and is obviously very easy for the U.S. to find alternative suppliers,” Timothy Ash, senior emerging markets strategist at Bluebay Asset Management, told CNBC.
Ash described Trump’s measures as meant to placate a Congress determined to punish Turkey for its assault on U.S. allies in Syria — now in its eighth day — that’s seen airstrikes, artillery shelling, civilian casualties and more than 130,000 people already displaced, according to international aid organizations.
They are “more for show than effect on the Turkish economy,” Ash suggested. “Nothing on limiting dollar transactions … Clearly, given the close personal bond between Trump and Erdogan, he was loathed to sanction Turkey — but has been pushed by the difficulties he now faces on the impeachment front.”
“He has to give the GOP sanctions cheerleaders, like (Republican Senator Lindsey) Graham, something.”
The White House did not respond to a CNBC request for comment.
Graham (R-S.C.) and Senator Chris Van Hollen (D-MD) last week introduced a bipartisan sanctions bill against Turkey for its ongoing actions in northern Syria. A House resolution condemning Trump’s decision to remove U.S. forces from the area was approved in an overwhelming vote of 354-60.
Washington and Ankara are on rocky footing following the Turkish offensive in Syria that began October 9, just days after Trump announced the withdrawal of U.S. troops in a move widely criticized as abandoning America’s Kurdish allies. The Kurdish militia groups comprise the bulk of the U.S.-backed Syrian Democratic Forces, who proved vital in driving ISIS out of the country alongside U.S. troops but who Turkey views as terrorists.
Critics accuse Trump of greenlighting the offensive by Turkey, something the president has denied while defending his decision as a means of bringing U.S. troops back home and letting other countries deal with ISIS.