Trade

Turkey hopes trade deals will protect it from Trump’s tariffs

January 9, 2025, 6:03 PM

Turkey trade — Finance minister Mehmet Şimşek said Turkey's strong trade agreements and important industrial position should work to its advantage

Minister says Turkey is ‘resilient’
Trade fallout could serve its interests
Global disruption could hurt

Turkey’s network of trade agreements, combined with its pivotal role as a major regional logistics and services provider, should help it weather any trade policy shifts by Washington in the coming years, according to the country’s finance minister.

Speaking at a meeting hosted by the Independent Industrialists and Businessmen’s Association in Istanbul on January 8, treasury and finance minister Mehmet Şimşek said there was uncertainty about what will happen after January 20, when president-elect Donald Trump returns to office, and what kind of changes will be made to tariffs.

“Some countries will be affected more than others by the US trade policy uncertainties,” Şimşek said.

“We are expected to be affected relatively less because we do not have a trade surplus with the US and we are already facing customs tariffs.”

While the direct fallout from Trump’s tariff plan may not be significant, the minister did say that by targeting China, as Trump promised to do while on the election trail, Turkey could be impacted.

“If the new US administration acts on what it said before the election, this may indirectly affect us,” Şimşek said.

One factor the minister said insulated Turkey from any trade war was its strong existing network of agreements with key partners.

With 62 percent of Turkish exports going to the 54 countries that it has free trade agreements with, including the EU with which Ankara has a longstanding customs union, the majority of Turkey’s trade was relatively immune to pressures, said Şimşek.

“Three-quarters of our exports are actually relatively more resistant to these trends,” he said.

Potential fallout from global trade wars could in fact serve Turkey’s interests, the minister added, promoting stronger regional integration as countries move to insulate themselves from broader stresses.

“Again, we have the advantage in that respect because we are an important industrial and service base in our region,” Şimşek said. “In addition, Turkey is a very important base in terms of logistics.

“There is fragmentation in global trade. There are serious uncertainties, but Turkey’s current structure includes resilience.”

Bozkurt Alan, director of the Multilateral Trade Studies Centre at the Economic Policy Research Foundation of Turkiye, is less certain that Turkey will remain largely unaffected by any Trump-driven uncertainties.

“Turkey has adopted a model of development based on exports,” he told AGBI.

“What Trump is saying may not directly concern us, with his statements targeting other countries, primarily China. But if this is to lead to disruptions in the global trade system that would undoubtedly result in our discomfort.”

If the US follows through with proposals to enact protectionist policies, other countries will have to respond, Alan said, which in turn would impact the existing rule-based global trade model.

“Any disruption to the international trade system will most definitely have a negative impact on our exports,” he said.