As trade minister Ömer Bolat put it on Friday, the Trump tariffs are “the best of the worst” for Turkey.
While the worry about the high duties has been setting off alarm bells in other sourcing nations, it appears to be an injection of optimism in the Turkish industry, which has been decelerating over the past two years.
Apparel exports from Turkey saw a decline of 6 percent in January-February 2025, and a drop of 4.47 percent year-on-year in 2024, with the last month of the year falling almost 11 percent. In 2023, apparel exports were down 5.86 percent, to $18.32 billion.
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In these two years there have been other factors to contend with: wages have increased more than 249 percent—factories have shuttered, margins have been thin.
Facing a Trump tariff of 10 percent, it is clear that trade minister Bolat is not exaggerating. Other sourcing locales—45 percent for Vietnam, 49 percent for Cambodia, 44 percent for Sri Lanka, 38 percent for Bangladesh—fared far worse.
The industry has been taking a hard look at all possible scenarios since president Trump’s announcement on April 2.
“This could be the beginning of a new era in global trade,” said Mustafa Gültepe, chairman, TIM (Turkish Exporters Assembly), adding that each sector was being examined carefully to assess future steps. “It seems that apparel exports can come to the forefront because the competitors of the ready-made clothing sector were mostly Far Eastern countries. China was coming to the forefront because there was less tax in labor-intensive sectors before and we did not have much chance of competing because of this,” he said.
In economic terms there appears to be a dawning hope: Turkey’s annual inflation rate dropped to 38.1 percent in March, down from 39.1 percent in February, according to the Turkish Statistical Institute, the lowest since December 2021, and 10 months into the declining numbers. Repairs to manufacturing units from the severe impact of the earthquake in February 2023 have been made. Nearshoring to Europe remains an option, and the competition from other sourcing countries like Bangladesh and Vietnam, which offered rates that Turkey could not compete with, could be waning.
Toygar Narbay, president, Turkish Clothing Manufacturers’ Association (Türkiye Hazır Giyim Sanayicileri Derneği or TGSD) pointed out the context more clearly: over two years the apparel exports sector had lost $4.6 billion. Apparel exporters had to compete with costs that were 61 percent more than Asia and 46 percent more than North America. “Along with the production loss in the textile industry, there has been a total employment loss of 290,000 in the textile and apparel industries in the last two years,” he said. Interest rates also rise while the exchange rate stayed 38 percent below inflation.
“This caused an extraordinary loss of profit and completeness in the industry,” he said. “The costs for apparel manufacturers increased by 27 percent in these two years, and profit margins declined from 10.5 percent to minus 5.1 percent. With the continuing situation we would close 2025 at a loss again with minus 4.5 percent,” he said.
Here’s the chance to fix things, he observed.
“Trump’s policies against China will increase geopolitical risks on the Asia-Pacific line, causing European and US buyers to review their supply security policies and turn to safer production centers. This will have a positive impact on Turkey, which has the largest vertical integration after China. It is also an advantage for us that the supply chains of Bangladesh and Vietnam, the largest exporters after China, are largely dependent on China.”
TGSD has already been working on the long term with the Horizon 2040 Strategic Plan, and planning a TGSD Development Academy to help the industry make further strides, including in the important areas of sustainability and innovation.
Other organizations have reflected a similar sentiment.
“We may have the chance to increase our market share and should make good use of our potential to attract new investments with our geographical location, young and dynamic workforce, strong industrial infrastructure and logistics advantages,” Seyit Ardıç, president, Ankara Chamber of Industry (ASO).
There are also those advising caution.
Erdal Bahçıvan, president of the Istanbul Chamber of Industry (ISO), observed: “We should prepare for the new competition conditions that will emerge within the framework of new tariffs that will disrupt all competition patterns in the world by studying our lessons very well. Because we have a picture in front of us that cannot be grasped with rote knowledge and stereotyped perspectives. Although the upcoming period will create opportunities for our economy and industry with specific targets, I think that the new process may also bring some risks in terms of our economy. It would be beneficial for our country to be specially prepared for each of our sectors.”
It appears that this time around the industry has the ear of the policy makers, too.
Bolat has made it clear that the government would be paying attention to the sector. “We’ve decided to accelerate our efforts to increase mutual trade and exports with the U.S. which ranks second in our exports, working tirelessly with TİM, Foreign Economic Relations Board (DEİK), and other business teams, especially the Union of Chambers and Commodity Exchanges of Turkey to make a shortlist of the areas with an competitive advantage,” he said on Monday. “These studies are ready, and we have the files. We will strive to turn this new period into an advantageous situation,” he said.
Turkish manufacturers have long been eyeing the U.S. market, and the consideration for a negotiation is in the cards, with plans for further discussion in May, when Bolat plans to attend the Turkish-American Conference in Washington.
Mustafa Gültepe stated that, “We plan to put this issue on the table in the meetings to be held in May.” He shared that Turkey “already had a balanced foreign trade relationship with the U.S. at around $15 billion to $16 billion exports, and an estimated $12 billion to $13 billion of imports.
“If we can strengthen our competitiveness, the [overall] $375 billion export target we set for 2028 will become achievable,” he said.
