Turkey Expects Easing of U.S. Tariffs on Exports

By Ezgi Erkoyun and Nevzat Devranoglu

ISTANBUL (Reuters) – Turkey anticipates that Donald Trump's presidency will lead to reduced tariffs on steel and textile exports, as stated by Trade Minister Omer Bolat on Thursday. The lira and Turkish assets are rallying due to optimistic expectations surrounding new U.S. trade and foreign policies.

> "We expect that…customs duties will be reduced in our foreign trade, especially in steel and textile products," Bolat mentioned on AHaber. He added that Turkey's defense and financial sectors could also see benefits.

Bolat did not provide further details. Trump's commitment to implement a 10% tariff on imported goods aims to curtail migration and swiftly resolve conflicts in Ukraine and the Palestinian territory of Gaza.

Following Trump's decisive U.S. presidential win on Wednesday, Turkey's lira appreciated by up to 0.4%, reaching 34.2 to the dollar, its strongest since mid-October.

Istanbul's stock index surged nearly 3%, marking its best performance since May on that day.

Investors indicated that any renewed U.S. initiative for peace could support Ankara’s 18-month economic recovery plan spearheaded by Finance Minister Mehmet Simsek, focusing on attracting foreign investments to combat soaring inflation.

Bolat expressed optimism that the incoming Trump administration might fulfill Turkey's defense industry needs, despite previous sanctions from Trump's first term related to Turkey's acquisition of Russian S-400 missile defenses.

Additionally, he anticipated a decrease in the impact of Washington's current sanctions linked to Russia's ongoing war in Ukraine.

Trump's proposed trade and immigration policies could also shield Turkey more than other major emerging market economies like Brazil, Mexico, and China, according to bankers.

Blaise Antin, head of EM sovereign research at TCW in Los Angeles, remarked, "The Turkey trade is a relative outperformer within global EMs with the Trump victory," emphasizing the importance of domestic economic management under Team Simsek for sustaining Turkey's positive outlook through 2025.

Recent aggressive interest rate hikes—reaching 50%—have begun to curb annual inflation, lowering it from above 75% in May to below 50% last month. This policy adjustment has led to an increase in net international reserves to $60 billion from -$5.7 billion, aided by returning foreign investors.

(Writing and additional reporting by Jonathan Spicer; Editing by Daren Butler, William Maclean)