Turkey urges U.S. to stay in trade target
Turkey urges U.S to stay in trade target
Turkey & United States’ Relationship
In February 2019, The United States and Turkey had dialogues to increase trade between the two regions up to a bilateral target of $75 billion. According to the Hurriyet Daily News, “Both countries are interested in signing a free trade agreement to remove all trade barriers in front of them but as [American-Turkish Council chair James] Jones recalled Turkey’s customs union agreement with the EU creates a restriction for the latter.” He goes on to state, “Trade volume between Turkey and the United States may reach $75 billion through a free trade agreement and the removal of regulations and tariffs, the chairman of the American-Turkish Council has said, stressing that the bilateral potential has never been realized.”
In August of 2018, President Trump doubled the import tariffs on steel and aluminum from Turkey, increasing the rate from 10% to 20% for aluminum and 25% to 50% for steel. Turkey took Trump’s action as an attack on its economy and announced retaliation tariffs on American goods targeting U.S. cars, alcohol and tobacco, as well as U.S. electronics, singling out iPhones. The U.S and Turkey relationship was a bit rocky much due to Turkey’s detainment of an American pastor. With tensions high, President Trump increased tariffs that hit Turkey hard in a time they were already proclaimed down. There was a 48% decline in the Turkish economy as a result of the doubled tariffs.
On May 16, 2019, President Trump decided to remove the higher tariffs and return to the original agreed upon level. According to Hurriyet Daily News, a source of News dedicated to the Turkish region, Trump states, “Given these improvements, I have determined that it is necessary and appropriate to remove the higher tariff on steel imports from Turkey.” Although, he still believes the 25% tariffs on steel are necessary.
Turkey is relieved that the tariffs are being cut, but encourages the United States to stick to the agreed bilateral target of $75 billion.
Terminating Turkey’s GSP Treatment
In the midst of the steel and aluminum tariff cuts, “The White House said it was appropriate to terminate Turkey’s eligibility to participate in the Generalized System of Preferences (GSP) program, based on its level of economic development. The decision is effective May 17, it added.” [Reuters]
U.S. Trade with Turkey
- Turkey was the United States’ 28th largest goods export market in 2018.
- U.S. goods exports to Turkey in 2018 were $10.2 billion, up 4.6% ($453 million) from 2017 and up 2.4% from 2008.
- Turkey was the United States’ 33rd largest supplier of goods imports in 2018.
- U.S. goods imports from Turkey totaled $10.3 billion in 2018, up 9.8% ($924 million) from 2017, and up 122.7% from 2008.
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