No one knows Trump’s next move. The 47th President of the United States appears to be embracing a version of the “Madman Theory,” a strategy once associated with President Richard Nixon. Nixon reportedly aimed to convince adversaries that he was unpredictable and capable of extreme actions, hoping this perception would deter them from challenging U.S. interests.
In any case, uncertainty is detrimental to business, making it increasingly difficult for governments to chart a clear course in economic and industrial policy.
The solution is making plans for every scenario possible, mapping out what is already there, assessing how things may unfold, and strategising accordingly. That is precisely what Türkiye must do in the face of tariff wars and rising protectionism—beginning with a clear assessment of the existing landscape.
U.S. Protectionism Spares No One
At the outset, the U.S. is more protectionist than before, and this situation is unlikely to change unless it significantly impacts the U.S. economy or voter sentiment. Moreover, such protectionism does not differentiate between allies and opponents. Consequently, both China, a competitor, and the EU, an ally, become targets of tariffs. Türkiye, too, may soon have a mark on its back.
The U.S. goal is clear: to make America great again. The path to achieving this lies in ensuring national and economic security, reducing the trade deficit and foreign dependency while boosting domestic manufacturing and job creation. A key priority is reciprocity, along with maintaining the U.S. technological edge. The U.S. seeks to restrict other countries’ access to critical technologies to maintain this advantage. This offers clues about what lies ahead.
What Awaits Türkiye?
The signals from Washington suggest that Türkiye is not likely to be immune to the next wave of U.S. protectionism. While the immediate focus of tariffs and restrictions may not be Türkiye itself, the ripple effects of these policies—combined with direct measures in areas of U.S. economic interest—could significantly impact Turkish industries. The question is not whether Türkiye will face challenges but rather in which areas and how.
First, the expanding web of tariffs will have indirect consequences. The U.S. has already imposed or threatened tariffs on key trade partners like the EU, Canada, and Mexico. Given the interconnected nature of global supply chains, any restrictions placed on these economies will inevitably raise costs for Türkiye as well. Higher input prices, supply chain disruptions, and shifting trade routes could create additional constraints on Turkish exporters and manufacturers.
Second, Türkiye may become a direct target in sectors where the U.S. seeks to close trade deficits and protect nationally significant industries. One example is the steel and aluminium—sectors, where the U.S. started applying a 25% tariff on imports of steel and aluminium products from all states, expanding its previous tariffs. The same logic could extend to industries where Türkiye has a competitive edge, but the U.S. sees a need for domestic revival. If trade deficits along with economic and national security remain a primary concern, Washington may restrict imports from Türkiye in critical domains or sectors where the imbalance is particularly high, such as defence and advanced manufacturing. Although overall U.S.-Türkiye trade remains balanced, the recent shift in Türkiye’s favour may prompt the U.S. to target strategic and politically important sectors to gain an advantage—both to protect domestic industries and respond to voter and lobbying pressures.
Third, the Turkish tech industry could face heightened scrutiny under expanded U.S. export controls. The U.S. has increasingly instrumentalised technology policy to protect its competitive advantage, restricting foreign access to critical technologies under the pretext of national security. If Türkiye’s growing tech sector, especially defence, becomes seen as a strategic risk—or if Turkish regulators take measures perceived as hostile to U.S. tech firms— Washington could respond with tighter trade restrictions or diplomatic pressure. Accordingly, treating U.S. digital companies in Türkiye, including taxation and regulatory oversight, may become a key point of contention in bilateral economic relations.
Beyond tariffs and regulations, the broader deregulatory stance of the U.S. administration could also create new challenges. A strong anti-regulation agenda, particularly one that frames foreign oversight as an attack on American businesses, may push Washington to challenge policies in Türkiye that it perceives as restrictive. This could extend beyond digital markets to areas like financial services, pharmaceuticals, and other heavily regulated industries, as well as anti-trust investigations.
These factors, combined, suggest that Türkiye must be prepared for a range of scenarios—from indirect disruptions in global trade to direct U.S. actions targeting key Turkish industries and policies. While there is no single path forward, planning is paramount. Rather than reacting to shifting policies, Türkiye should adopt a proactive approach that not only mitigates risks but also turns challenges into opportunities, ensuring resilience and preparedness for all possible outcomes.
Turning Challenges into Opportunities
Regardless of which scenario unfolds, Türkiye should focus on reducing vulnerabilities while chasing opportunities. Accordingly, strengthening ties with certain trade partners, such as the EU, can provide a buffer against U.S. tariffs, while closer regulatory alignment enhances Türkiye’s position in European markets. For example, Türkiye could prioritise updating its Customs Union agreement with the EU to include services, agriculture, and digital trade, addressing longstanding gaps that limit deeper economic integration. Expanding trade with Asia, Africa, and Latin America would further diversify economic dependencies. In Africa, targeted free trade agreements and investments in infrastructure projects, particularly in energy and construction, could solidify Türkiye’s presence. Moreover, Türkiye can leverage its logistics infrastructure, such as its growing railway and port capacity, to strengthen trade routes with Asian markets. Similarly, Türkiye’s expanding defence and manufacturing exports to Latin America may offer an opportunity to deepen trade ties beyond traditional partners.
Türkiye must focus on innovation-driven growth to ensure long-term competitiveness, with its tech sector playing a central role. Investing in R&D and high-tech manufacturing can reduce reliance on U.S. technology while establishing Türkiye as a regional innovation hub. Similarly, aligning industrial policy with emerging global trends—such as AI, semiconductors, and green technologies—can help Türkiye secure a stronger position in international supply chains. At the same time, Türkiye must refine its trade strategy by leveraging diplomatic channels to negotiate exemptions where possible and proactively shaping policies to minimise exposure to future trade barriers. Beyond these measures, a scenario-based approach is essential: Türkiye must develop flexible policy responses that anticipate varying levels of U.S. protectionism, allowing it to adapt swiftly while identifying new economic opportunities.
Adapting to U.S. Trade Shifts: Scenario-Based Strategies
To navigate the uncertainties of U.S. protectionism, Türkiye must prepare for multiple scenarios, each requiring a distinct strategy to mitigate risks and seize opportunities.
In a best-case scenario, U.S. policies remain relatively stable, allowing Türkiye to strengthen its position in global supply chains. With minimal trade barriers, Türkiye could focus on deepening economic ties with the EU, fostering innovation, and expanding its tech sector to reduce reliance on U.S. markets. By diversifying trade relations and maintaining diplomatic engagement, Türkiye could mitigate the negative effects of shifting U.S. policies while ensuring steady economic performance.
A more challenging scenario would involve moderate disruptions, such as selective tariffs or stricter regulations on key industries. In this case, Türkiye must leverage its geopolitical advantages, diversify trade relations, and ensure regulatory flexibility to adapt to shifting policies. Maintaining strong diplomatic engagement with both the U.S. and other economic partners would be crucial. Accordingly, rather than resorting to retaliatory tariffs that could escalate tensions, Türkiye should prioritise negotiating exemptions, particularly for industries where U.S. supply chains are also dependent on Turkish inputs. Strategic partnerships with key U.S. stakeholders, including industry groups and lobbying efforts, could help secure favourable outcomes. Additionally, Türkiye should enhance its dispute resolution capabilities within the WTO framework to counter unfair trade practices effectively.
Türkiye faces direct trade restrictions, heightened tariffs, or even sanctions targeting its strategic sectors in a worst-case scenario. This would demand an urgent pivot toward alternative markets, enhanced domestic production, and stronger regional alliances. A proactive industrial policy and investment in technological self-sufficiency would be essential to withstand economic pressure.
An alternative scenario could see the U.S. turning further inward, reshaping global trade dynamics. Such a shift would require Türkiye to strengthen its position as a regional hub, deepen economic ties with emerging markets, and drive technological breakthroughs that reduce dependency on U.S. innovations and regulations.
Proactive Not Reactive
Regardless of the scenario, Türkiye’s success in navigating shifting global trade policies will depend on its ability to remain adaptable, leverage its geopolitical strengths, and enhance economic resilience. Strengthening trade ties with key partners, investing in high-tech industries, and diversifying export markets will be essential to mitigating risks and seizing new opportunities. Proactively aligning regulatory frameworks with the EU, negotiating favourable trade terms, and fostering domestic innovation can further bolster Türkiye’s position. Rather than reacting to U.S. policies, Türkiye must adopt a forward-looking strategy that prioritises long-term economic stability and competitiveness in an evolving global landscape.