President Erdogan warns of global economic storm amid escalating trade wars

President and ruling Justice and Development Party (AK Party) Chairman Recep Tayyip Erdogan on Wednesday warned of a looming global economic storm, citing the ripple effects of the United States’ recent tariff decision and growing volatility in international markets.

Speaking at his party’s parliamentary group meeting in Ankara, Erdogan said, “It is becoming clear that the trade war, sparked by customs tariffs, will have global consequences. Saying a storm is coming that will affect everyone is not an exaggeration.”

Erdogan’s remarks came amid intensifying trade disputes and shifting economic policies worldwide.

He said the developments signal a deeper structural change in the global order and added that Türkiye sits at the center of this transformation.

Türkiye at the center of global shifts

Erdogan stated that the world is “on the verge of a very significant change,” and argued that the global system built after World War II, and solidified after the Cold War, is now “fundamentally cracking.”

“We are witnessing the rise of a more protectionist structure replacing the neoliberal economic and political order,” he said. “Not just in Asia, Europe, or America—almost everywhere, states are developing policies aimed at strengthening their societies and economies.”

He emphasized that countries are preparing for a new era of struggle, “from trade to security, from defense to demographics,” and said nearly all global political actors are now “searching for new approaches.”

“The world, especially in terms of economy and military capacity, is rapidly shifting from a unipolar structure to a multipolar architecture,” Erdogan said. “The recent stream of global developments should be interpreted as the labor pains of a new era.”

Ankara’s expanding role in global affairs

Erdogan stressed that Türkiye is not merely adapting to change but actively shaping it. “This process, as historic as it is painful, is being best understood, best managed, and most strongly navigated both in the field and at the table by countries like Türkiye,” he said.

“Once sidelined in global competition for various reasons, our country—God willing—is becoming one of the founding actors of the new era,” Erdogan said. “We are already beginning to see the signs. Türkiye is now a country whose words carry weight, whose stance is closely followed, and whose name is mentioned more frequently on every platform.”

According to President Erdogan, “A world order without Türkiye cannot be built, and even if attempted, it cannot survive.”

He added, “Türkiye is no longer a background actor in the games of major powers. It is now the writer and executor of its own scenarios. The new Türkiye is a strong Türkiye—respected, successful, and capable.”

Mounting risks in the global economy

Turning back to the global economic picture, Erdogan described the current environment as “a severe test” for the global economy. “Over the past week, international trade wars have entered a new phase,” he said. “Tariff disputes have escalated further with increasingly heated rhetoric.”

He warned of serious consequences stemming from the situation. “The aftershocks of the quake in capital markets have not yet settled,” he said.

“All of this is expected to affect the global economy in three ways: first, rising inflationary pressures caused by shrinking trade volumes and supply chain disruptions; second, a deepening climate of uncertainty leading to a serious loss of confidence in markets; and third, fluctuations in commodity prices,” he added.

Erdogan concluded that these trends make it “highly likely that the global growth rate will slow down, and that some major economies may even enter recession.”

Türkiye’s economic strategy and resilience

Erdogan also outlined Türkiye’s response to these challenges. Following the May 14–28 general elections, he said a “very strong team” was formed to address key economic issues such as inflation and cost of living, and to shield the country from external shocks.

“Since May 2023, we have resolutely implemented a comprehensive program to make Türkiye more resilient to shocks while reducing our external vulnerabilities and strengthening macro-financial stability,” he said.

“Yes, the world is experiencing significant uncertainty. But Türkiye has a strong economic program that lights its way,” he added.

Erdogan said no major negative impact is expected on Türkiye’s trade, production, or exports. “As we are among the countries subject to low tariffs, we believe we will weather this hazardous period more easily compared to others,” he said.

“Let our business world be at ease. Let our citizens rest assured,” he added.

He predicted that in the medium to long term, Türkiye will be less affected and will post stronger growth than its peers. “There are four main reasons for this,” he said.

“First, 62% of our exports are conducted with countries we have free trade agreements with. Second, while the world is drowning in debt, our total debt is only 93% of our national income. Third, while developed countries are aging, Türkiye stands out with a young, dynamic workforce. And fourth, our strong infrastructure, diverse manufacturing industry, and high potential in the services sector set us apart positively,” he added.

Inflation, growth and employment trends

President Erdogan said the government’s macroeconomic stabilization and reform program has become a significant advantage.

“The disinflation process, which is the main priority of our economic program, is continuing,” he said. “Annual inflation has been declining for 10 months. March inflation came in at 38.1 percent.”

He said this downward trend is expected to persist with delayed effects of monetary policy, stronger fiscal support, and supply-side reforms.

“We are maintaining our disciplined stance in fiscal policy. The spending discipline and savings measures we initiated last year will continue this year,” he added.

The president pointed to improvements in Türkiye’s external balance. “Our gross external financing needs are decreasing,” he said. “The current account deficit, which stood at $55.1 billion in May 2023, declined to $11.5 billion in January. The drop in oil prices is also in our favor and will help close the current account deficit.”

Erdogan noted that growth is becoming more balanced while employment remains strong. “In February, the unemployment rate fell to 8.2%—the lowest since 2012,” he said.

On the export front, he said results have been encouraging. “On Friday, March 28, we achieved the second-highest daily export figure in our Republic’s history, with $2.065 billion in goods exports,” he said. “In March, our exports rose 3.2% year-on-year to $23.4 billion. Our annualized exports reached $263.4 billion over the past 12 months.”

He also cited the central bank’s gross reserves, which remain strong at $156.5 billion.