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Turkey grapples with big trade deficit with China

Turkey grapples with big trade deficit with China

President Donald Trump has stepped up his trade war on China after the United States’ trade deficit in goods with China hit a record $419.2 billion last year. US exports to China were worth $120.3 billion, while its imports were 4.5 times bigger, totaling $539.5 billion. Turkey, saddled in relative terms with a worse trade deficit with China, has begun to openly complain about the imbalance and has raised the prospect of taking measures, but how much can it really do?

Last year, Turkey’s exports to China totaled $2.9 billion, while its imports were seven times bigger, standing at $20.7 billion. China was the 16th largest buyer of Turkish goods and the second largest exporter to Turkey after Russia. In 2017, China was the No. 1 exporter to Turkey, but in 2018 Turkish imports from China decreased 11.3% while its imports from Russia rose 12.7%, putting Russia in the top spot. Despite the downtick, Turkey’s trade gap with China remains massive, accounting for 33% of Turkey’s overall foreign trade deficit of $55.1 billion.

Looking at the past decade, Turkey’s trade deficit with China totaled a staggering $190.6 billion from 2009 to 2018. The gap, which stood at $11 billion in 2009, enlarged steadily, peaking at $23 billion in 2016 before falling to $20.4 billion in 2017 and $17.8 billion last year. The decrease in the past two years, however, stems not from an increase in Turkey’s exports but a shrinkage in the bilateral trade volume.

Judging by the trend in Turkish exports, closing the gap seems impossible. Exports to China peaked at $3.6 billion in 2013, only to go down in the ensuing years. Throughout the past decade, Turkish exports to China have fluctuated between $2 billion and $3 billion, with the year 2013 being the sole exception.