Turkey sees opportunity as Trump's tariffs upset the global economic
order
[April 08, 2025] By
ANDREW WILKS
ISTANBUL (AP) — As the dust settled on President Donald Trump’s tariffs,
business figures and economists in Turkey have begun to glimpse a silver
lining to the economic storm clouds.
Turkey was hit with a baseline 10% tariff in Trump’s announcement last
week, compared with higher tariffs for many other countries, raising the
prospect that the world’s 17th largest economy could leverage an
advantage from the tariff regime.
Finance Minister Mehmet Simsek said Monday that the country’s focus on
domestic demand rather than exports would mean a more limited impact on
the economy.
“Turkey has free trade agreements with a total of 54 countries outside
the U.S. and the EU,” he said, adding that “68% of our exports go to
these countries.” Turkey has a customs union with the European Union
that removes trade restrictions.
Speaking Friday, the day after Trump’s announcement, Simsek said
Turkey’s “relatively low tariff rate may provide a comparative advantage
in some sectors.”
Can Selcuki, managing partner of Istanbul Economics Research, said the
main negative effect on Turkey would likely be through intermediate
goods it supplies to countries or entities that export to the U.S. which
are subject to higher rates, such as the EU, which is subject to a 20%
tariff.
Turkish exports to the U.S. were $16.7 billion in 2024, according to the
Office of U.S. Trade Representative. It imports a similar level of goods
and services from America.
This level is dwarfed by exports to the EU, which President Recep Tayyip
Erdogan said in January reached $108.7 billion last year.
“Any loss of competitive power of EU products inevitably impacts Turkey
because Turkey exports intermediate goods to input to final EU
products,” Selcuki said. “This is the most obvious negative part.”
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 Turkey, however, could exploit the
new global trade environment to its advantage.
“A lot of manufacturing production will have to be relocated and the
picture Trump is drawing is telling everybody to rethink their
supply chains,” Selcuki added. “Turkey, with its strong
manufacturing base and closeness to the EU, is in a unique position
to make use of this reorganization.”
Sekib Avdagic, president of the Istanbul Chamber of Commerce,
suggested that companies based in countries with higher tariff
rates, such as China, may seek to open factories in Turkey to export
to the U.S. under a lower rate.
“Turkey’s use of this opportunity will depend on its strategy to
develop its export sectors and find new markets,” he told the
state-run Anadolu news agency.
Gurkan Yildirim, head of the Turkish Young Businessmen Association,
added that “if Turkey offers a suitable investment environment, it
can attract the investments of these companies.”
Selva Bahar Baziki, an economist at Bloomberg Economics in Ankara,
noted that even considering indirect trade through third countries,
less than 2% of Turkey’s GDP was exposed to U.S. demand.
The most threatened industries would be those exporting metals and
textiles.
Addressing the volatility that has beset the Turkish lira in recent
years, which influenced high inflation, Baziki added that tariffs
would produce “no inflationary pressure from exchange rate movements
related to trade policies.”
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