Turkey’s Erdogan vows U.S. boycott, but diplomats resume talks

Turkey’s president appeared to escalate a dispute with the United States that has helped foment a Turkish currency crisis, claiming Tuesday that his country will boycott U.S.-made electronic goods. Behind the scenes, however, diplomats resumed contact to ease tensions.

Addressing a conference of his ruling-party faithful in the capital, Recep Tayyip Erdogan added fuel to the spat with the U.S., even as local business groups called on his government to settle the dispute through diplomacy.

Investors seemed to look through the fiery rhetoric, pushing the lira off record lows on reports that Turkish and U.S. government officials held talks on Monday.

“We will implement a boycott against America’s electronic goods,” Erdogan told the conference. He suggested Turks would buy local or Korean phones instead of U.S.-made iPhones, though it was unclear how he intended to enforce the boycott.

The move is seen to be in retaliation to the United States’ decision to sanction two Turkish ministers over the continued detention of an American pastor on terror-related charges, and to double tariffs on Turkish steel and aluminum imports.

Behind the scenes, however, diplomatic dialogue appears to have resumed. Turkey’s state-run news agency and U.S. officials say U.S. national security advisor John Bolton had met with the Turkish ambassador to Washington on Monday.

That helped ease tensions in financial markets, with the Turkish lira stabilizing somewhat near record lows. It was up 5% on Tuesday, at 6.55 per dollar, having fallen 42% so far this year, with most of those losses coming in recent weeks.