Azernews.Az

By News Center

Following US President Donald Trump’s additional taxes that deeply shook global trade, the world economy has entered a new era. While the taxes to be imposed on countries such as China, the European Union (EU) and India mean a contraction in global trade, it is almost certain that mutual retaliation will deepen the crisis. It is stated that Türkiye, with its increasing geo-strategic importance and export potential, will also be affected by this new era. The superiority of some Far Eastern countries, especially China, in Turkiye’s foreign trade deficit is striking.

In a period when protectionism is increasing in the global economy, it is emphasized that measures should be taken against countries with which Türkiye has had a serious foreign trade deficit for many years. The importance of identifying products that can be produced domestically and imposing high taxes on the same goods imported is emphasized. In a conjuncture where countries such as the US, EU, Canada and Mexico resort to reciprocal customs duty retaliation, Türkiye also needs to review its foreign trade customs tariff. This situation is seen as mandatory to protect domestic producers and exports. Otherwise, there is concern that the domestic market will be invaded by Chinese goods.

The same danger applies to other Far Eastern countries. According to the data of the Ministry of Trade, Turkiye had a trade volume of approximately 71.4 billion dollars with China, India, South Korea and Japan last year. Turkish trade deficit with these 4 countries is around 60.3 billion dollars. China is shown as the biggest threat to Türkiye's domestic production potential. Turkiye exported 3.1 billion dollars last year by selling products such as fruit, animal and vegetable oils, pistachios, grains, flour, aquatic products, dairy products, marble, metal ores, lead, chrome, copper, iron, zinc and boron ores to the Asian giant. In return, we imported a huge 44.9 billion dollars.

We have purchased products from China, especially phones, computers, cameras, electronics and machinery equipment, as well as textiles, glassware, plastics and furniture. It is known that importers make large purchases from China, especially when the exchange rate is stable and the Turkish Lira is gaining value, with an appetite for cheap products. In order to break this huge trade imbalance that has formed against Türkiye, it is being discussed to impose taxes on goods that we cannot produce domestically. Many sector representatives emphasize the importance of protecting domestic production against the Chinese invasion. It is said that it is imperative to encourage domestic producers and take measures to deter imports in sectors such as glassware, textiles, furniture and plastics during this period.

Within the scope of these measures, it is frequently brought up that import duties, especially those applied to China, should be increased. It is stated that all import duties currently applied by Türkiye to Chinese goods should be increased by 30 percent. Such a tariff would reduce imports while also generating tax revenues of around $12 billion. Economists point out that even if one factory is established each month with an investment of roughly $1 billion from the revenue, domestic production would increase and inflation would decrease as a result of the abundance of supply.

The same situation applies to India. While Turkiye sells agricultural products, primarily marble, sunflower seed oil, steel scrap, carbonates/peroxycarbonates to this country, it purchases mineral fuels, motor vehicle parts/accessories, unprocessed aluminum, smartphones, and synthetic yarn in return. Turkish has a trade deficit of $5.8 billion with $7 billion worth of imports against $1.2 billion worth of exports. Turkiye imports $9.2 billion worth of goods from South Korea against $596 million worth of exports. In order to eliminate this imbalance, it is emphasized that measures should be taken, especially for the import of luxury technology products. In Japan, Turkiye sells $677 million worth of goods while it purchases $4.7 billion worth.

In order to break this huge trade imbalance that has formed against Turkiye, taxes should be imposed on products other than those that we cannot produce domestically. The entry of hundreds of products subsidized by the Chinese state into Turkiye should be prevented. The way for domestic production can be paved by increasing the import tax on products that can be produced in Turkiye or by completely banning them. It is said that taking precautions against Chinese products that increase imports will not be enough. Customs duties should also be increased against imports that may come from China's neighbors, Japan, South Korea and India. Because China uses the method of infiltrating the markets it wants through front companies it has established in other countries.