ANKARA (Reuters) - Turkey’s Trade Ministry will implement a reciprocal reduction in tariffs on U.S. imports this week, after the United States halved tariffs on Turkish steel imports, two Turkish sources said on Tuesday.
The United States had doubled tariffs on Turkish steel and aluminum imports last August amid a diplomatic row between the NATO allies that accelerated a fall in the lira. Turkey retaliated by doubling tariffs on U.S. cars, alcohol and tobacco imports.
Last week, the White House halved those tariffs, in a rare positive development between Ankara and Washington, but also terminated Turkey’s eligibility for the Generalized System of Preferences (GTS) program, in a move Turkey said contradicted trade goals.
On Tuesday, the sources said Turkey will halve tariffs on passenger cars, alcoholic drinks, tobacco, cosmetics and PVC. The lowered tariffs will take effect this week with a presidential decree, the sources said.
Currently, tariffs on U.S. whiskey stand at 140%, while the rate is at 120% for passenger cars, 50% for PVC and 60% for cosmetic products. Tariffs on these products will be halved and rates on other products will also be lowered, the sources said.
The United States imported $1.66 billion worth of goods in 2017 from Turkey under the GSP, or 17.7 percent of total imports from Turkey, the U.S. Trade Representative website said. Imports included vehicles, vehicle parts, jewelry and precious metals.
The United States had begun reviewing Turkey’s status in the program during last year’s row. Ankara had hoped that Washington would not go ahead with the move, saying it ran contrary to the two countries’ trade goals.
During last year’s dispute, U.S. President Donald Trump raised steel tariffs to put pressure on Turkey to release an American pastor detained on terrorism charges.
The pastor was released last October, but the argument helped spark a currency crisis that wiped out nearly 30 percent of the lira’s value against the dollar and pushed the economy into recession.
Ankara and Washington remain at odds over a host of issues, ranging from Turkey’s planned purchase of Russian S-400 missile defense systems, which could trigger sanctions, to diverging interests in Syria.
Reporting by Nevzat Devranoglu; Writing by Tuvan Gumrukcu; Editing by Dominic Evans