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: 6/18/2019

At the crossroads of Europe and the Middle East, Turkey still presents immediate and long-term opportunities for American firms.  The country continues to enjoy an advantageous geographical position, a strong middle class, a youthful population (median age of 31) and a strong sense of entrepreneurism.    However, Turkey has experienced a series of economic challenges over the last year.  Currently the 19th largest economy (in nominal terms), Turkey’s ambitions to become a top ten economy by 2023 (the 100th anniversary of the Republic), could be stymied by growing debt, a weakening currency, rising unemployment and an increase in protectionist and populist measures.  Furthermore, U.S. commercial interests continue to face challenges in establishing, growing or even sustaining operations.  Nearly 1,900 American firms, including some of the United States’ largest and most recognizable brands, are active in Turkey; many have been in the market for decades.  Moreover, more than 60 U.S. companies have established offices in the country.  However, a complex and burdensome regulatory environment, periodically turbulent politics, bouts of domestic instability, an often-opaque bureaucracy, onerous and at times protectionist government procurement processes, localized manufacturing requirements, an unpredictable judicial system, weakening rule of law, purges in the public and private sectors and other market access barriers all weigh, in varying degrees, on U.S. firms’ ability to do business in Turkey.  Therefore, U.S. companies 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 several decades, the United States and Turkey have enjoyed a strong political and military relationship.  While they do not 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 4,000,000 refugees from Syria, Iraq and other countries.  That said, in recent years, there has been a marked increase in geopolitical divergences, which have impacted the commercial sphere.  There was a significant increase in tariffs in 2018 on a range of U.S. products as well as sporadic anti-American sentiment, which have at times led to calls to boycott American products.  Nevertheless, U.S. brands overall continue to enjoy widespread favorability and recognition among Turkish consumers.

According to Turkish government statistics, the Turkish economy grew by 2.6% in 2018, a marked decrease from the over 7% growth seen in 2017.  Prior years’ rapid growth was boosted by public and private infrastructure projects, including airports, highways and new housing developments.  However, Turkey is feeling the weight of the large amounts of public and corporate debt (much of which is denominated in dollars or euros) that it has taken on.  This, along with financial market concerns about the near-term health of Turkey’s macro economy, has led to an over 30% loss in value in the Turkish lira against the dollar since early 2018 and a near 14% unemployment rate, the highest in nearly a decade.    The economy contracted by 3% in the fourth quarter of 2018 and 2019 is not expected to fare much better, though recovery is expected in 2020.  That said, 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, leading to energy and other investment opportunities.

U.S.-Turkish goods trade was approximately $20.5 billion in 2018, a figure that has remained relatively consistent over the last few years.  The balance, however, has shifted from annual surpluses to a roughly $150 million trade deficit in 2018.  That said, U.S. goods exports to Turkey have been on the rise (however minor) since 2016.  The U.S. trade surplus has fallen in part due to market access barriers, such as tariff increases and localization requirements.    In 2018, U.S. goods represented nearly 6% of total Turkish imports and yet the United States was Turkey’s 4th largest source of imports (behind Russia, China and Germany), according to Turkish government statistics.

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.  Furthermore, through the SelectUSA Program, Turkish companies are increasingly looking at investing in the United States, not least as a potential buffer against a weakening Turkish economy.  In 2017, Turkish Foreign Direct Investment (FDI) into the United States was valued at $2.0 billion, less than half the $4.3 billion the U.S. has invested in Turkey, but over 18% from 2016.

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 the Turkey website and U.S. Embassy in Turkey website.

Prepared by the International Trade Administration. With its network of more than 100 offices across the United States and in more than 75 markets, the International Trade Administration 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 trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Turkey Trade Development and Promotion