22 May 2019

 

Predictions

  • President’s anti-Western rhetoric will continue in coming weeks but foreign policy compromise with US remains likely
  • Claims of “economic sabotage” by Western powers will help shore up nationalist support ahead of re-run of Istanbul mayoral election
  • Economic concerns and threat of sanctions will however likely force Government to adopt more conciliatory approach after 23 June

Analysis

The lira dropped 0.4% in value against the dollar on 17 May, after Washington removed Turkey from its Generalised System of Preferences (GSP) programme. The White House justified the move by saying Turkey is sufficiently economically developed to no longer qualify for the trade levy exemptions. Trade Minister Ruhsar Pekcan condemned the US decision, claiming it would hinder plans to reach a USD 75 billion bilateral trade target. Meanwhile, however, the US also halved import tariffs on Turkish steel from…

 

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