Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 7/20/2018
At the crossroads of Europe and the Middle East, Turkey presents promising immediate and long-term opportunities for American firms.  Turkey’s growing economy, advantageous geographical position, expanding middle class, youthful population (median age of 30), and dynamic entrepreneurial class have made this country a growing market for U.S. exporters.  Currently, the 17th largest economy, Turkey has grand ambitions to become a top ten economy by 2023, the 100th anniversary of the republic.  Additionally, over 1,400 American firms, across virtually all industry sectors, are active in Turkey, including 60 U.S. companies that have established regional headquarters.  However, like many middle income developing markets, Turkey presents a range of challenges to doing business, including complex and at times turbulent politics, bouts of instability domestically and regionally, a complex and opaque bureaucracy, onerous terms and conditions in government procurements, including increasing localization requirements, an unpredictable judicial system, weakening rule of law, a recent spate of terrorist attacks, purges in the public and private sector following the July 2016 attempted coup, and market access barriers across a range of sectors.  As of July 2018, the country remains under an official State of Emergency, which suspends the country’s normal legal framework and adds greater uncertainty for investors.  American firms are encouraged to work closely with the U.S. Commercial Service in Turkey (CS Turkey) to conduct due diligence, find qualified partners, and vet potential projects.
For many decades, the United States and Turkey have enjoyed strong political and military relations.  While we do not always agree on every issue, both countries partner closely on a range of regional and international concerns.  A NATO member since 1952, Turkey has supported missions around the world, including Afghanistan, Iraq, the Balkans, and other areas.  Turkey is an ally in the fight against the Islamic State (ISIS).  Notably, Turkey provides significant assistance with the related humanitarian crisis and hosts over 3,000,000 refugees from Syria, Iraq and other countries.
In 2017, Turkey’s economy reported  7.4% growth, with GDP per capita at approximately $11,000.  This rapid economic growth is being driven in part by massive public investment in infrastructure projects, including in bridges, airports, highways, and railways.  Turkey’s geographic position makes it an important energy and logistics corridor, linking Europe with the Middle East, the Caucasus and Central Asia. Turkey’s growth has caused a subsequent increase in energy demand.  Turkey’s status as a net importer of energy is a factor in the country’s persistent and large current account deficit, presenting a structural impediment to long-term growth.  To address the increasing energy demands, Turkey is enhancing capacity by making strategic energy investments.  Beginning in 2014, Turkish economic growth has slowed from previous levels; current forecasts indicate that the economy will continue to grow at approximately 4-4.5% in the coming year.  Unemployment, especially in eastern Turkey, remains stubbornly high.  Domestic and international economic conditions have placed downward pressure on the Turkish Lira, which has lost approximately 20% in relation to the U.S. dollar since the start of 2018.  The lower value of the Turkish Lira affects demand for U.S. exports and presents a challenge for the many Turkish firms and individuals with dollar-denominated debt.
U.S.-Turkish trade peaked at nearly $20 billion in 2011, but decreased in subsequent years, falling to $17.4 billion in 2016.  In 2017, however, total bilateral trade climbed again to $19.2 billion, with U.S. exports accounting for $9.7 billion, more than a 4% increase over 2016, but still well below the $14.7 billion in 2011.  The U.S. trade surplus in 2017 stood at roughly $300 million, falling in part due to market access barriers, such as tariff increases and localization requirements.  Political uncertainty and security risks are also detractors.  In 2017, U.S. goods represented 5% of total Turkish imports, behind the European Union (EU), which accounted for 36% (of which Germany had 9%), China (10%), and Russia (8%).    
Nevertheless, there are still strong market opportunities for U.S. companies.  In fact, American firms are pursuing energy, aerospace, defense, infrastructure, transportation, and health care projects throughout the country.  Additionally, CS Turkey has assisted hundreds of small and medium-sized firms in exporting to, and expanding in, the Turkish market.  Also, Turkish companies are increasingly looking at investing in the United States, which is supported through the SelectUSA program.  In 2016, Turkish Foreign Direct Investment (FDI) into the United States was valued at $1.3 billion, and Turkey was ranked the 9th fastest growing source of U.S.-bound FDI.
To map out the opportunities and better understand the challenges of doing business in Turkey, American firms, both large and small are encouraged to engage with CS Turkey for market information, updates on regulatory issues, major projects and business developments.  With offices in Ankara, Istanbul and Izmir, we encourage business visitors to meet with our multi-lingual, sectoral-focused business development teams for individualized market consultations. For more information, visit: www.export.gov/turkey and https://tr.usembassy.gov

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.

Turkey Trade Development and Promotion