Trade Wars and Planning the Future

• 24.07.2018
• Archive

While considering the opposite, the biggest trade war of the recent history has turned into reality. While trade restrictive measures have been taken mutually between USA and Chine which are the big economies of the world, the blowing protection wind is causing disintegration between USA and European countries. Expansion in the scope of trace wars and stiffening in the showdown between the countries in this matter bearing concern in terms of the future of the global growth.

USA started to levy additional customs duty for the imported products from China for 34 billion dollars. The product amount which will be included in the penalty is said to increase to the 450 billion dollars, upon the reaction from China against the penalty taxes. On the other hand, Trump went so far as to threaten by criticizing Harley-Davidson’s decision of moving the production aimed at European market to the abroad because of the tariffs. Protective measures are being taken successively in the recent weeks in various product groups concerning us and our industrialists in the neighbor markets such as Iran, Iraq and Jordan.

These examples are indicating that thread is being lost in terms of protection. It is obvious that various people from producers to consumers, from exporters to importers are affected negatively. What is more important is that the retaliations which will be stiffened gradually in company with lost of control, surprises and unpredictability can carry the countries to the undesired introversion spot. History has shown many times that protection reaching to that spot carries the massive conflicts with itself. We hope that the things do not get to that spot for the peace and tranquility of the world.

Despite of these challenging internal and external conditions, our industrialists’ perseverance for struggle never diminish. “Our 'Türkiye's Second Top 500 Industrial Enterprises' study that we examine the production operations of relatively small or medium scale industrial enterprises indicated a strong performance in respect of our industry in 2017 after 2016 that had been a challenging year for both the world and Türkiye.

While an attractive performance is achieved by the Second Top 500 with 43.9 percent increase of operating incomes and 67.2 percent increase of period incomes, it is seen that the enterprises allocate a significant portion of their operating incomes like 42.8 percent to financing expenses just like the ICI Top 500.

The industrialists feel the pressure of high scale fluctuations in interests and exchange rates more this year. And this indicates that the financing burden on the industrialists increasingly gets heavier and creates concerns about the sustainability of profitabilities.

While the trade wars are turning into reality and financial resources are getting hard to be accessed through a cheap cost as before in the world and Türkiye, everyone should make their plans for their tomorrows and future properly starting from these new facts.

I hope that Blessed Feast of Sacrifice will go well for our country, the whole humanity, us and our families.

Erdal Bahçıvan
Istanbul Chamber of Industry
Chairman