Whipsaw Wednesday – Futures Collapse as Turkey Strikes Back With Tariffs – What Will Happen When China Does?

Does our economy have a glass jaw?  

We like to punch others but it doesn’t look like we can take one as the Futures where KO’d with one punch as Turkey announced they would raise tariffs on US goods and boycott other goods like, gasp, iPhones which are, I think, 90% of the US economy.  “For the sake of a pastor, they have come to the point of breaking relations with Turkey,” Erdogan’s spokesman Ibrahim Kalin told reporters in Ankara on Wednesday.  It’s not so much Turkey as the realization that ALL the other countries we are in a Trade War with (ie. ALL the other countries) may stop rolling over and start going on the attack against Trump and his bullying tactics.  

Turkey is already benefiting from standing up to Trump with a 7% pop in the Lira this morning but it’s still down over 30% against the Dollar this year, so nothing for them to celebrate over at the moment.  The decree signed by Erdogan doubled Turkish tariffs on passenger cars to 120%, on alcoholic drinks to 140% and on tobacco to 60%. Tariffs were also doubled on goods such as cosmetics, rice and coal.  

The United States was the fourth largest source of imports to Turkey last year, accounting for $12Bn of imports and, as noted yesterday, Turkey’s GDP is $850Bn – so they really don’t have that much to lose cutting off relations with the US while we desperately need their strategic location for NATO defense.  In other words, it’s another victory Trump has handed to Putin and Russia as we push Turkey out of NATO’s arms and back to Russia – something that was competely unthinkable before Trump got “elected”.  

Hey, but at least there are no tapes (remaining) of Trump saying the “N” word over and over again on his Apprentice set because THAT would be bad, right?  Not that it would matter, Trump would just spin it the way he’s spinning the Russia investigation – relentlessly until people aren’t sure what to believe anymore.  Trump comes down on Omarosa for “changing her tune” about him after he’s no longer paying her to say nice things, saying she has…

Provided courtesy of Phil’s Stock World.