Turkey Rolls Back Tariffs on U.S. Imports Before Erdogan-Trump Meeting

Move seen as a signal of warming trade relations and diplomatic rapprochement

Turkey has terminated a series of retaliatory tariffs imposed in 2018 on U.S. goods, including passenger cars, fruit, rice, tobacco, chemicals, and more, as President Tayyip Erdoğan prepares to visit the White House this week. Analysts see the move as a diplomatic olive branch designed to improve trade ties ahead of the Erdoğan-Trump meeting.

What Was Reversed & Why It Matters

• The tariffs revoked were originally imposed as retaliation for U.S. steel and aluminium tariffs under Trump’s earlier presidency.
• U.S.–origin products affected by both the initial tariffs and the cancelled levies include passenger vehicles, fruit, rice, tobacco, solid fuels, and certain chemical goods.
• Turkey said the change was published in its Official Gazette and frames the rollback as part of efforts to diversify cooperation with the U.S., lift trade volume, and reduce trade barriers.

Market Impacts & Strategic Implications

• Trade & exporters: U.S. exporters of cars, agricultural goods, and chemicals may benefit from renewed access to Turkey at “normal” tariff levels, improving margin prospects. Turkish importers, consumers, and downstream industries relying on U.S. inputs may see cost relief.
• Diplomatic signaling: This reversal is likely intended to set a positive tone for Erdoğan’s visit to Washington, and could lay the groundwork for further trade or military cooperation agreements. It may also signal Turkey’s intention to recalibrate its trade policy toward Western partners.
• Emerging-market investor sentiment: Markets may view Turkey more favorably if this signals reduced trade risk with the U.S. Turkey’s lira, assets, and sovereign risk premium could benefit, especially if policy consistency improves.
• Policy ripple effects: Others in the region or those subject to U.S. trade sanctions may monitor whether Turkey’s move prompts U.S. reciprocation or encourages similar tariff rollbacks elsewhere.

Risks & What to Watch

• Adherence & Enforcement: Ensuring the cancelled tariffs don’t re-impose through indirect policy or regulation will be critical. Transparency on which items are fully cleared is needed.
• Political expectations vs reality: While Turkey is easing trade barriers here, other contentious issues (military cooperation, human rights, regional alignment) remain and could complicate bilateral diplomacy.
• Volatility risk: Markets may initially respond well, but any backtracking or perceived unfairness in the implementation could reverse gains quickly.
• Macro issues still looming: Turkey’s economy faces big challenges, high inflation, currency pressure, external debt, that trade deals alone may not solve. Investors will watch interest rates, fiscal policy, and inflation carefully.

In summary, Turkey’s cancellation of some U.S. import tariffs ahead of President Erdoğan’s meeting with President Trump is a strategic diplomatic gesture with concrete trade implications. For U.S. exporters and Turkish consumers, costs may fall; for markets, the move offers a signal of possible rapprochement and reduced trade risk. The core theme: easing trade friction could reopen opportunities, but delivering on promises and consistency will determine lasting impact.