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But the souring in U.S. -Turkey relations could give new strength to Russia-Turkey ties, already a source of concern among Turkey's Western allies.

Mr Trump said tariffs on aluminium imports would be increased to 20% and the tariff on steel imports will be raised to 50% as the Turkish Lira "slides rapidly downward against our very strong Dollar!".

"This innocent man of faith should be released immediately", Trump previously wrote on Twitter when it became clear Turkey would not release the evangelist, who was ordered to be held under house arrest. The president launched his steel and aluminum tariffs on the grounds that maintaining a robust domestic metal industry was a core national-security interest of the United States, and that competition with metal imports was threatening to drive said industry into extinction.

"Before it is too late, Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives", he said.

The Turkish lira plunged on Friday, raising questions about the country's financial stability, as investors anxious about the president's unorthodox economic policies and a dispute with the United States that has led to sanctions. Washington slapped tariffs of 25 percent on steel and 10 percent on aluminum in March for imports from several countries, including Turkey.

Trump made his unexpected announcement on Twitter from his golf club in Bedminster, New Jersey, as the Turkish currency, the lira, fell to all-time lows against the USA dollar.

Last week, he called on Turks to convert their foreign currency and gold into Turkish lira to help the currency.

Brunson denies the charge and his cause resonates with Christian conservative supporters of Trump, who could also be influential as Republicans seek to retain control of Congress in midterm elections in November. "You will not make money at the expense of Turkish people". For China, stabilizing a fellow emerging economy's currency has value, but Beijing could also benefit from becoming an economic friend to a North Atlantic Treaty Organisation state whose relationship with the West is increasingly strained.

Some US officials say Turkey is holding Brunson as a bargaining chip after an executive at Turkey's state-owned Halkbank was convicted and imprisoned in the United States in May for helping Iran evade US sanctions. U.S. stocks were also rattled.

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The Brunson dispute triggered the collapse in the Turkish currency as investors feared USA financial sanctions.

Treasury and Finance Minister Berat Albayrak - who is Erdogan's son-in-law - was scheduled later on Friday to outline a "new economic model". It came as a Turkish delegation returned from the United States, reporting no progress on negotiations involving a USA pastor imprisoned in Turkey.

The slump is attributed to the tensions with the U.S. and concerns about President Recep Tayyip Erdogan's control of monetary policy.

"The surge in Turkish inflation, bond yields and the even more dramatic plunge in Turkey's exchange rate in 2018 suggest that the country could now be in danger of heading for a bust", Berenberg economist Carsten Hesse said.

Turkey, home to the Incirlik air base which is used by USA forces in the Middle East, has been a North Atlantic Treaty Organisation member since the 1950s.

The sudden announcement turned a run on the Turkish lira into a rout; it crashed more than 18 percent to a new record low against the dollar. "Turkey is an important strategic partner militarily and economically".

"Also completely underestimated is Turkey's capacity to effectively shut down everything that happens in Brussels if they want to, because Brussels works on consensus and nothing, literally nothing happens without consensus", he said.

The currency turbulence coincides with the most bitter dispute with the United States since the 1974 Turkish invasion of Cyprus, which so far shows no sign of abating.

In the City, fund managers and investment commentators warned of the risk of capital flight from the country and flagged up the risk to European banking stocks - such as Spanish lender BBVA and Italian group UniCredit - from their exposures to Turkish lending.

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