The lira dropped to an all-time low Friday as geopolitical tensions between NATO allies Turkey and the United States continued to escalate.

The big picture: President Trump announced via tweet that the U.S. would be raising tariffs on Turkey to 50% on steel and 20% on aluminum. Per CNBC, the tweet and the subsequent currency sell-off came after a Turkish delegation returned from the U.S. having made no progress in talks about pastor Andrew Brunson, whose detention prompted the White House to slap sanctions on high-ranking Turkish officials last week.

• President Recep Tayyip Erdoğan urged Turkish citizens to exchange American dollars and gold into lira in a speech Friday, declaring a need to fight back against those who have "waged an economic war" against his people, per Reuters.
• Erdoğan also said he held a phone call with Russian president Vladimir Putin, whose country has also been hit by U.S. sanctions, to "discuss economic ties," reports the AP.
• The Turkish economy was already in a fragile state prior to the escalation of tensions, largely because of the pressure Erdoğan has exerted on the central bank to lower interest rates.

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