Tariffs Won’t Stop Turkey’s Invasion of Syria, Analysts Warn
FRANKFURT — Doubling tariffs on Turkish steel imports, as
President Trump said he would do Monday, might make investors nervous. But it would take a much broader attack on the economy of Turkey to restrain its tanks from moving deeper into Syria, analysts say.
The reason is simple: Tariffs approved last year by White House officials have already gutted Turkey’s exports to the United States. They can hardly go any lower.
Mr. Trump’s threat to cut off talks on what he called a $100 billion trade deal with Turkey isn’t expected to have much of an effect, either. The figure was, to put it mildly, aspirational. Current two-way trade between Turkey and the United States is only about $21 billion.
Because neither American nor Turkish officials had detailed how they would more than quadruple trade, “analysts did not expect any immediate favorable impact on the Turkish economy,” said Selva Demiralp, economics professor at Koc University in Istanbul. “Thus, the withdrawal of this deal should not have much of an impact, either.”
The measures announced by the president are unlikely to destroy the Turkish economy, as he has warned, but plenty of other existing threats could. Economists have long regarded Turkey as a bubble waiting to burst because of government mismanagement, an inflated building boom and a shaky currency. Turkey’s military incursion into Kurdish-controlled
northern Syria has unsettled investors who already had concerns about the region’s stability.
Mr. Trump’s tariff threat does give investors yet another reason to be apprehensive.
“The sanctions are ineffective, and they know they are ineffective,” said Sebastien Galy, senior macro strategist at Nordea Asset Management in Luxembourg. But he added: “Tariffs frighten both businesses and consumers. They save more and invest less because they are afraid of the future. The impact on expectations can be quite considerable.”
If the president really wanted to hurt Mr. Erdogan, Mr. Galy said, he would take steps to make it difficult for Turkish commercial banks and the central bank to conduct transactions in dollars.
The White House also said Monday that it would impose sanctions on
several top officials in Ankara, including the defense and energy ministers and their ministries, essentially severing them from the global financial system. Mr. Trump’s executive order allows the sanctions to be expanded to other officials or government entities.
But comprehensive financial sanctions against the Turkish government would be seen as extremely hostile considering Turkey is still nominally a NATO ally.
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