HOW WILL UKRAINE-RUSSIA WAR AFFECT TURKISH TRADE?

Abstract

The Ukraine-Russia war continues to threat international trade and global supply chains. This article analyses the impacts of Russia-Ukraine war on Turkey’s exports and imports. For this purpose, we analyzed 4-digit Harmonized Tariff Schedule (HTS) Turkey-Russia and Turkey-Ukraine trade figures between 2016 and 2020 to reveal the prospective most affected sectors from the conflict. Our findings show that Turkey’s agricultural exports both to Russia and Ukraine will be affected negatively by the conflict. The exports of citrus fruits and tomatoes are expected to shrink. Other Turkish exporters which will feel the squeeze are the producers of motor vehicles, petroleum oils and machinery. Turkey may get into trouble in importing various iron and steel products, wrought aluminum, wheat, coal, natural gas, petroleum oils and ammonia from Russia if the sanctions would harm the ability of Russian traders doing business. Importing semi-finished products of iron, wheat, sunflower, maize or corn, various iron and steel products, ferro alloys from Ukraine may be problematic for Turkey as Ukraine takes a significant double-digit share in Turkey’s imports of these goods. It appears global rise in food and energy prices could exacerbate Turkey’s budget deficit and deteriorate already rising domestic inflation, which may in turn hit Turkish traders in the medium term.