FRANKFURT — Doubling tariffs on Turkish steel imports, as President Trump said he would do Monday, might make investors nervous. But it would take a much broader attack on the economy of Turkey to restrain its tanks from moving deeper into Syria, analysts say.
The reason is simple: Tariffs approved last year by White House officials have already gutted Turkey’s exports to the United States. They can hardly go any lower.
Mr. Trump’s threat to cut off talks on what he called a $100 billion trade deal with Turkey isn’t expected to have much of an effect, either. The figure was, to put it mildly, aspirational. Current two-way trade between Turkey and the United States is only about $21 billion.
Because neither American nor Turkish officials had detailed how they would more than quadruple trade, “analysts did not expect any immediate favorable impact on the Turkish economy,” said Selva Demiralp, economics professor at Koc University in Istanbul. “Thus, the withdrawal of this deal should not have much of an impact, either.”
The measures announced by the president are unlikely to destroy the Turkish economy, as he has warned, but plenty of other existing threats could. Economists have long regarded Turkey as a bubble waiting to burst because of government mismanagement, an inflated building boom and a shaky currency. Turkey’s military incursion into Kurdish-controlled northern Syria has unsettled investors who already had concerns about the region’s stability.
Mr. Trump’s tariff threat does give investors yet another reason to be apprehensive.
“The sanctions are ineffective, and they know they are ineffective,” said Sebastien Galy, senior macro strategist at Nordea Asset Management in Luxembourg. But he added: “Tariffs frighten both businesses and consumers. They save more and invest less because they are afraid of the future. The impact on expectations can be quite considerable.”
If the president really wanted to hurt Mr. Erdogan, Mr. Galy said, he would take steps to make it difficult for Turkish commercial banks and the central bank to conduct transactions in dollars.
The White House also said Monday that it would impose sanctions on several top officials in Ankara, including the defense and energy ministers and their ministries, essentially severing them from the global financial system. Mr. Trump’s executive order allows the sanctions to be expanded to other officials or government entities.
But comprehensive financial sanctions against the Turkish government would be seen as extremely hostile considering Turkey is still nominally a NATO ally.
Turmoil in Turkey has already caused the German carmaker Volkswagen to reconsider a big investment there. The company said Tuesday that it had postponed plans to build a $1.7 billion factory in the western part of the country that would employ 4,000 people and produce 300,000 Volkswagen and Skoda vehicles a year.
“We are monitoring the current situation with great concern,” Volkswagen said in a statement, without elaborating.
A nightmare for the Turkish government, led by Recep Tayyip Erdogan, would be a plunge in the value of the lira. That would cause the prices of imported goods to spike, fuel inflation inside Turkey and undermine popular support for Mr. Erdogan.
On Tuesday, the lira slipped about 0.6 percent versus the dollar, a relatively small amount for an often volatile currency. Analysts assume that the Turkish central bank and state-controlled commercial banks are using their dollar reserves to buy liras in the market and prevent a steeper decline.
Eventually, though, the central bank will run out of dollars. The longer Turkey continues fighting in Syria, the greater the stress on the Turkish currency, analysts say.
“History suggests that geopolitical tensions, especially involving the U.S., are not kind to the lira,” analysts at Oxford Economics said in a note to clients on Tuesday.
The Turkish steel industry is feeling plenty of pain without any help from the United States. Production is down 10 percent this year, said Ugur Dalbeler, a member of the board of the Turkish Steel Exporters Association and chief executive of Colakoglu Metalurji, a steel producer based in Istanbul.
“It is tough,” Mr. Dalbeler said by phone from Mexico, where he was attending an industry gathering.
Turkish steel makers have been slammed from numerous directions. Customers in the Middle East have suffered from tensions in the region. Europe has restricted steel imports in response to a glut in global supply. Demand from Japan, another important customer, has slumped. United States tariffs are, by comparison, a small problem.
Mr. Dalbeler expressed anger that the tariffs, originally justified on national security grounds, were being used to put pressure on Turkey.
“Doubling tariffs again proves that the president is not using his authority for national security,” he said. “He’s using it against Turkey politically.”
The United States imposed tariffs of 50 percent on Turkish steel last year amid a dispute over a detained American pastor. The Trump administration cut the tariffs to 25 percent in May, to the same level as tariffs imposed on most other foreign producers. But the damage was already done.
From January through August, imports of Turkish steel by the United States plunged 80 percent to 136,000 tons, “which is nothing, basically, on a global scale,” said Alex Griffiths, an analyst at Wood Mackenzie, a research firm.
“Exports were already to the level where I wouldn’t consider the United States to be a major export destination,” Mr. Griffiths said.
Mr. Trump mentioned the $100 billion trade deal with Turkey during a news conference with Mr. Erdogan in Japan in June. After Mr. Erdogan said the goal was to expand trade to $75 billion a year, Mr. Trump said that was too low.
“I think the $75 billion is small,” he said, according to an official transcript. “I think it’s going to be well over $100 billion soon.”
In September, Commerce Secretary Wilbur Ross acknowledged during a visit to Ankara that “$100 billion sounds like a lot.” But he added that it would be less than 2 percent of the United States’ total trade.
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