A Tragedy for Turkey and the US
After years of unsustainable growth driven by loose fiscal and monetary policies and foreign borrowing, Turkey is finally facing an economic reckoning. But with the Trump administration doubling tariffs on Turkish steel and aluminum, the prospects for reform have shrunk substantially.
WASHINGTON, DC – Among the many casualties of US President Donald Trump’s trade-policy misadventures, Turkey may be the saddest case to date. Until a few years ago, Turkey was an economic and geopolitical success story – one in which the United States could proudly claim to have played a key role. Though there were occasional bilateral disputes, Turkey remained a reliable ally for many decades.
But all that began to change in recent years. This summer, the Turkish economy started imploding under the weight of overly loose monetary and fiscal policies. Then, the US responded to the Turkish government’s failure to release an imprisoned American pastor by “punishing” the country with trade barriers and targeted sanctions. Trump announced that he was doubling US import tariffs on Turkish aluminum and steel, to 20% and 50%, respectively.
Turkey’s currency crisis could have been a wakeup call for the Turkish government to reverse its unsustainable economic policies. But owing to the Trump administration’s actions, President Recep Tayyip Erdoğan can instead pin the problem on the “bullets, cannonballs, and missiles of the economic war being waged against our country.”
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