As the dust settled on President Donald Trump’s tariffs, business figures and economists in Türkiye have begun to glimpse a silver lining to the economic storm clouds.
Türkiye was hit with a baseline 10 percent 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 on Monday that the country’s focus on domestic demand rather than exports would mean a more limited impact on the economy.
“Türkiye has free trade agreements with a total of 54 countries outside the US and the EU,” he said, adding that “68 percent of our exports go to these countries.”
Türkiye has a customs union with the European Union that removes trade restrictions.
Speaking on Friday, the day after Trump’s announcement, Simsek said Türkiye’s “relatively low tariff rate may provide a comparative advantage in some sectors.”
Relocating production
Can Selcuki, managing partner of Istanbul Economics Research, stated that the primary negative impact on Türkiye would likely come from intermediate goods it supplies to countries or entities that export to the US, which face higher rates — such as the EU, which is subject to a 20 percent tariff.
Turkish exports to the US were $16.7 billion in 2024, according to the Office of US Trade Representative. It imports a similar level of goods and services from America.
However, this level pales in comparison to exports to the EU. In January, President Recep Tayyip Erdogan stated that Türkiye’s exports to Europe reached $108.7 billion in 2024.
“Any loss of competitive power of EU products inevitably impacts Türkiye because Türkiye exports intermediate goods to input to final EU products,” Selcuki said. “This is the most obvious negative part.”
Türkiye, 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.
“Türkiye, with its strong manufacturing base and closeness to the EU, is in a unique position to make use of this reorganisation.”
Investment environment
Sekib Avdagic, president of the Istanbul Chamber of Commerce, also suggested that companies based in countries with higher tariff rates, such as China, may seek to open factories in Türkiye to export to the US under a lower rate.
“Türkiye’s use of this opportunity will depend on its strategy to develop its export sectors and find new markets,” he told the Anadolu Agency.
Gurkan Yildirim, head of the Turkish Young Businessmen Association, added, that “if Türkiye offers a suitable investment environment, it can attract the investments of these companies.”
