As the sweeping reciprocal tariffs U.S. President Donald Trump unleashed last week have sent world markets into a tailspin, 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% tariff in Trump’s announcement, 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.
Treasury and Finance Minister Mehmet Şimşek said 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 U.S. and the EU,” he said, adding that "68% of our exports go to these countries.” Türkiye has a customs union with the European Union that removes trade restrictions.
Speaking Friday, the day after Trump’s announcement, Şimşek said Türkiye's "relatively low tariff rate may provide a comparative advantage in some sectors.”
Trade Minister Ömer Bolat called the tariffs on Türkiye the "best of the worst," given higher levies on other countries, but still said that the government wanted to negotiate with the U.S. to lift the new levies.
Can Selçuki, managing partner of Istanbul Economics Research, said the main negative effect on Türkiye would likely be through intermediate goods it supplies to countries or entities that export to the U.S. that 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 Erdoğan said in January reached $108.7 billion last year.
"Any loss of competitive power of EU products inevitably impacts Türkiye because Türkiye exports intermediate goods to input to final EU products,” Selçuki 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,” Selçuki added. "Türkiye, with its strong manufacturing base and closeness to the EU, is in a unique position to make use of this reorganization.”
The baseline tax took effect on Saturday. The higher rates are due to take effect on Wednesday. European Union imports will face a 20% tariff, while Chinese goods will be hit with a 34% tariff, bringing Trump's total new levies on China to 54%.
On Monday, Trump vowed additional 50% levies if Beijing does not withdraw retaliatory tariffs on the U.S. Beijing said on Tuesday it would never accept the "blackmail nature" of U.S. threats.
Şekib Avdagiç, president of the Istanbul Chamber of Commerce (ITO), suggested that companies based in countries with higher tariff rates, such as China, may seek to open factories in Türkiye to export to the U.S. at 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 (AA).
Gürkan Yıldırım, head of the Turkish Young Businessmen Association, added that "if Türkiye 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 Türkiye's gross domestic product (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.”
