European economist Carsten Hesse said Friday that even if the export of goods to Turkey falls 20 percent that would take no more than 0.1 percentage point from annual GDP in the 19 countries that use the euro currency. Only 4 percent of U.S. steel imports came from Turkey in the first half of 2018, with the volume dropping nearly 50 percent from 2017, according to data from the Office of the U.S. Trade Representative.
Bank shares across Europe fell and the euro slipped to its lowest since July 2017 as the Financial Times quoted sources as saying the European Central Bank was concerned about European lenders' exposure to Turkey.
The United States is the world's biggest steel importer. Trump wrote. "Aluminum will now be 20% and Steel 50%".
Erdogan on Friday appealed for calm and renewed a call on people to change foreign money into local lira.
The lira fell further as Erdogan spoke.
It fell to a record low this morning, and has now dropped 18 per cent today to 6.5 lira to the dollar, compared with 5.5 lira last night, as a deepening monetary crisis and diplomatic relations with the U.S. deteriorated.
Erdogan reportedly was defiant, telling worshipers after Friday prayers that Turkey "will not lose the economic war".
"If you have dollars, euros or gold under your pillow, go to banks to exchange them for Turkish lira".
Turkey's woes have been aggravated by investor worries about the economic policies of Erdogan, who won a new term in office in June with sweeping new powers. He claims higher rates lead to higher inflation - the opposite of what standard economic theory says.
Erdogan's son-in-law - acknowledged that the central bank's independence was critical for the economy, promising stronger budget discipline and a priority on structural reforms.
The lack of central-bank action to support the currency is also spooking investors and Erdogan's previous comment that interest rates are the "mother and father of all evil" hasn't helped. "While they have dollars, we have our people, law and Allah", the Turkish leader said addressing citizens in the Black Sea city of Rize.
He added that "attempts to exert economic pressure on Turkey were futile".
Treasury and Finance Minister Berat Albayrak has vowed to execute Turkey's new economic model together with "all national and global stakeholders", while stressing that a "decisive" approach and the Central Bank's independence would be maintained.
On the energy front, crude prices dropped on growing concerns that global trade disputes will slow economic growth and demand for fuel, but losses were limited by USA sanctions against Iran which look set to tighten supply. "On some days, I end the day with a loss". "Due to the foreign debts of companies and banks and the current account deficit, there is a great need for foreign capital".