President Recep Tayyip Erdoğan on Wednesday said Türkiye is expected to be less affected by a "severe storm" he said seemed to be coming after U.S. President Donald Trump's "reciprocal" tariffs on dozens of countries took effect, escalating a global trade war.
Trump's punishing tariffs, including massive 104% duties on Chinese goods, have shaken a global trading order that has persisted for decades, raised fears of recession and wiped trillions of dollars off stock markets.
Türkiye is among the economies subject to the lowest U.S. tariff of 10% and is viewed as being among a handful of countries emerging as potential winners.
Erdoğan said the global system was "fundamentally cracking," and that the world is witnessing the "rise of a more protectionist structure," which he said is replacing the neoliberal economic and political order.
"It is clear that trade wars, reignited through tariff increases, will have global repercussions. It would not be an exaggeration to say that a severe storm is coming, one that will impact everyone, large and small," Erdoğan told his ruling Justice and Development Party (AK Party) lawmakers.
According to the president, Türkiye is among the countries best positioned to read and manage the "painful" global transition in economy and international politics, both at the negotiating table and in the field.
"Türkiye is becoming one of the founding actors of this new era. We are already beginning to see the signs of this transformation," Erdoğan said.
Türkiye, whose iron, steel and aluminum exports took a hit from earlier U.S. tariffs, now stands to benefit as other global traders endure even higher levies.
Government officials have also pointed out the potential benefits of being a relatively cheaper source of goods.
Trade Minister Ömer Bolat has called the tariffs on Türkiye the "best of the worst," given the rates imposed on many other countries. He still said the government wanted to negotiate with the U.S. to lift the new levies.
Erdoğan said Türkiye is not expecting a negative situation for its trade, production and exports as a result of the tariffs, which went into effect on Wednesday.
“We think that we will overcome this period more easily than many countries since we are one of the low-tariff countries," he noted.
Thanks to manageable U.S. trade exposure and lower oil prices, Türkiye has a chance to outperform other emerging markets hit by Trump’s tariffs “once the dust settles,” Treasury and Finance Minister Mehmet Şimşek said on Tuesday.
“When the dust settles, we hope and believe Türkiye could positively decouple” in investors’ eyes from more troubled emerging economies in Asia and elsewhere, Şimşek told the Financial Times.
He noted that Türkiye’s $1.3 trillion economy relies heavily on trade with countries that have free trade agreements, such as those in the European Union, the Middle East, Central Asia and North Africa.
According to Şimşek, roughly 80% of Türkiye’s trade is conducted with these partners, while trade with the United States accounts for only about 5% of Türkiye’s total.
Erdoğan said the government's economic program had made Türkiye resilient to external shocks and that they expected stronger economic growth in the medium to long term compared to peer countries.
“There is serious uncertainty in the world, but there is a strong economic program that illuminates Türkiye's path," Erdoğan added.
“In the medium to long term, we expect Türkiye to achieve stronger growth compared to similar economies.”
The slowdown in price growth, the priority of the government's medium-term program, is ongoing, Erdoğan said.
The program, implemented since mid-2023, had centered around tight monetary policy, mainly aimed at curbing stubborn inflation, which slowed to 38.1% in March.
It marked the lowest since December 2022 and extended the fall from a peak of around 75% last May.
The Turkish central bank has initiated an easing cycle and cut its policy rate to 42.5% gradually in the past three scheduled meetings. Before that, it raised the rate by 4,150 basis points to cool inflation.
"The delayed effects of monetary policy, stronger fiscal support, and supply-side reforms will further drive inflation downward," said Erdoğan.
“We are maintaining a disciplined fiscal stance. The spending discipline and savings measures we initiated last year will continue this year as well.”
