How Turkish industry plans to circumvent US tariffs

How Turkish industry plans to circumvent US tariffs


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Turkey has good reasons to expect US economic sanctions, over and beyond tariffs on steel and aluminium. The emerging trade war matters; in 2017, the US market was worth $11,9bn to Turkish exporters.

Given the political risk, the Turkish-American Business Association is leading in the development of an industrial zone in the US, reaping the “Made in the USA” political benefits. The main rationale is that tariffs on semi-finished goods are always lower than for finished products.

Although Turkey has negotiated tax exceptions on more than 16,000 Turkish products, the investment reduces political risk and secures a profit under all scenarios.  There is an additional benefit, namely moving up the value chain.

The project has already attracted 170 investors, Al-Monitor reports; the target is 500 investors.

The zone would pack bulk food produce from Turkey to US standards – including fruits, nuts, and bay leaf – circumventing a7% tariff targeting retail goods.

Turkish marble producers too are looking to move from the wholesale market to refined products, by cutting the marble on site. In cosmetics too, producers estimate that Turkish perfumes can secure a better price in the US.

Paradoxically, the trade war with China could also benefit Turkish exporters, who could stand by to substitute Chinese exports.

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