How Trump’s victory could reshape Türkiye-US economic ties

As the 2024 U.S. presidential election looms, the possibility of Donald Trump reclaiming the presidency has stirred significant interest regarding the future of Türkiye-U.S. economic relations.

Zoom in: Trump’s potential presidency could significantly transform the two countries’ economic relations through revamped trade deals, strategic investments and changes in defense contracts.

Trade agreements, investments

• Revamping trade deals: Trump’s administration is expected to prioritize renegotiating trade agreements to favor U.S. exports. This could involve revisiting the existing trade deal with Türkiye and potentially imposing new tariffs or trade barriers. Professor Dr. Michael A. Reynolds of Princeton University suggests that Trump’s “America First” agenda might lead to stringent trade policies affecting Turkish exports to the U.S.
• Increased US investments: Trump might push for increased American investment in Türkiye’s infrastructure, technology, and energy sectors. Asst. Prof. Samuel J. Hirst from Bilkent University notes that Trump’s emphasis on economic nationalism could result in a surge of U.S. capital flowing into strategic Turkish industries.

Defense contract

• Military sales: Trump’s presidency could lead to changes in defense contracts, particularly concerning Türkiye’s purchase of American military equipment. This might include negotiating more favorable terms for U.S. defense companies or pushing for Türkiye to purchase more advanced technology. According to a recent analysis by Dr. Ahmet K. Erdem of the Middle East Technical University, Trump’s administration is likely to seek increased defense cooperation, potentially benefiting Türkiye’s military modernization efforts.

Economic sanctions, tariffs

• Potential sanctions relief: Trump’s administration might lift or ease sanctions imposed on Türkiye, particularly those related to economic or geopolitical disputes. As noted by Dr. Elif Akcora of Istanbul University, Trump’s history of favoring direct negotiations over sanctions could lead to a more flexible approach to Türkiye’s economic restrictions.
• Tariff adjustments: The potential rollback of tariffs imposed by the previous administration could benefit Turkish exporters, especially in sectors like steel and aluminum. This shift could also affect U.S. industries that rely on Turkish imports.

Strategic investments

• Focus on the energy sector: Trump may prioritize strategic investments in Türkiye’s energy sector, particularly in oil and natural gas exploration. This aligns with his administration’s previous focus on securing energy resources. According to a report by the U.S. Energy Information Administration (EIA), Türkiye’s energy sector could see increased collaboration with American firms under Trump’s presidency.
• Infrastructure development: Investments in Turkish infrastructure, such as transportation and logistics, could be bolstered. Trump’s administration might pursue projects that align with U.S. economic interests and improve trade routes between the two countries.

Impact of Trump’s policies

• Personal rapport with Erdogan: Trump’s close relationship with President Recep Tayyip Erdogan could facilitate smoother diplomatic and economic negotiations. As noted by Assc. professor Anton Fedyashin of American University, Trump’s personal rapport with Erdogan may lead to more collaborative economic policies.
• Enhanced trade: Under Trump, the potential for increased trade and investment could lead to significant economic opportunities for both countries. Türkiye might benefit from new infrastructure projects and defense contracts, while the U.S. could gain from increased market access and strategic investments.
• Economic opportunities: Under Trump, Türkiye could potentially benefit from increased economic cooperation in areas such as defense, energy, and infrastructure. This aligns with Trump’s previous efforts to bolster ties with countries he views as critical to U.S. interests.

The big picture: While Trump’s return to the presidency could lead to substantial changes in Türkiye-U.S. economic relations, the full extent of these changes will depend on several factors, including congressional support and global economic conditions.