Australia could be collateral damage in Trump's economic 'war' with Turkey

Stocks were on a five-week winning streak before last week

RICHARD DREW AP Stocks were on a five-week winning streak before last week

The tariffs come a day after President Recep Tayyip Erdoğan initiated a boycott campaign against USA electronic goods, singling out Apple iPhones.

Investors are anxious not only about Turkey's souring relations with the USA, a longtime North Atlantic Treaty Organisation ally, but also Turkish President Recep Tayyip Erdogan's economic policies and the country's high debt accumulated in foreign currencies.

He said: "Erdogan has not shown any sign of backing down and going to a more orthodox policy and if things get worse with the Turkish Lira there will be an increase in non-performing loans and you are going to have a blow through to the European banking system".

"If they've got iPhone, there is Samsung on the other side".

Turkish President Tayyip Erdogan signed a decree Wednesday to raise tariffs on USA imports including cars, alcohol and tobacco.

Neither the White House, Turkey's Ministry of Foreign Affairs nor Apple immediately responded to a request for comment.

The Turkish lira rose for a second day on central bank liquidity measures, while other emerging market currencies stumbled again, with the South African rand hitting a 13-month trough and the Indian rupee lingering near an all-time low.

Separately, Russian Foreign Minister Sergey Lavrov, on an official visit to Ankara, said the increased USA tariffs and sanctions imposed by Washington are "based on the desire to dominate everywhere in everything, to control worldwide affairs and to achieve unilateral advantages on global markets".

One Turkish court has rejected an American Christian pastor's appeal to be released from house arrest and for his travel ban to be lifted, but an upper court is yet to rule on the appeal, his lawyer told Reuters on Wednesday.

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And then he capped it all off by pointing to the many great things she had set about him previously. She also released an audio recording of the conversation she had with John Kelly when he fired her.

On Friday, US President Donald Trump doubled tariffs on aluminum and steel from Turkey in response to the detention of a US citizen.

The Turkish envoy conveyed the message the pressure and threats would only lead to a "chaos" in relations which could only improve after Washington abandons the language of "threats", said Turkey's foreign minister Mevlut Cavusoglu.

Mr Erdogan also renewed a call for Turks to convert their dollars into the Turkish lira, to help strengthen the country's currency which has lost 40% in value this year.

The lira bounced another 5%, sharply extending Tuesday's gains as authorities further tightened the screws on foreigners aiming to short the currency.

But the Gulf country also shares a strategic partnership with the USA, hosting a military base that serves as one of Washington's most important overseas military bases with operations throughout the Middle East.

But fundamental concerns about the economy persist, experts say.

The tension between the two states stemmed out of a recent skirmish over a U.S. pastor Andrew Craig Brunson who was sentenced to nearly two years in prison on terror charges.

Turkey, which has a military base in Qatar, rushed through supplies to the Gulf state after Saudi Arabia, the United Arab Emirates, Bahrain and Egypt imposed the boycott.

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