Trump’s Tariffs Push U.S. Firms Toward Türkiye as a Manufacturing Hub

As U.S. President Donald Trump’s additional tariffs on China continue to disrupt global trade, Türkiye is emerging as a key alternative manufacturing hub, attracting increased attention from American companies, according to Timothy Scott, a faculty member at Sabancı University.

In an interview with bigpara.hurriyet.com.tr, Scott emphasized that while Trump and Turkish President Recep Tayyip Erdoğan have expressed a mutual goal of doubling bilateral trade volume, achieving this requires favorable economic conditions.

“The tariffs imposed by the U.S. and the EU on China could steer companies toward outsourcing in Türkiye, and early signs of this trend are already visible,” Scott stated.

Walmart’s Outsourcing Shift and U.S. Manufacturing Challenges

Scott highlighted that Walmart, a retail giant with an annual revenue of $648 billion, sources 70%-80% of its products from China and could face direct price increases due to Trump’s tariffs.

“Chinese firms are unwilling to set up manufacturing plants in the U.S., and with no incentives from the U.S. government, the only option left is for American companies to bring production back home,” he explained.

However, bringing manufacturing back to the U.S. is economically unfeasible due to high labor costs:

• Unionized auto factory workers in the U.S. earn an average annual salary of $200,000.
• The U.S. unemployment rate remains low at 4%, limiting available workforce.

Apple serves as a prime example of these economic constraints. Despite its $94 billion net profit, the tech giant fully outsources production to Taiwan-based Foxconn in China. While Apple is gradually shifting production to India, progress has been slow.

“Walmart began exploring outsourcing opportunities in Türkiye after growing concerned about Trump’s tariff policies,” Scott added.

Türkiye’s Strategic Advantage Over China

With logistical advantages and a strategic trade position, Türkiye is becoming an attractive alternative for U.S. firms seeking to reduce reliance on China. Walmart and other American corporations are actively exploring Türkiye as a manufacturing hub.

However, Scott warned that some industries could suffer under protectionist trade policies, impacting Türkiye as well.

“The EU’s push to mandate electric vehicles is already hitting the European automotive sector hard. Volkswagen plans to lay off over 30,000 employees, and as a major automotive producer, Türkiye could also feel the effects of this shift,” he cautioned.

Chinese Investments in Türkiye: A Workaround for Tariffs?

Scott pointed out that Trump’s tariff-focused trade policies extend beyond China, also impacting NAFTA (the U.S.-Canada-Mexico trade agreement).

“There are manufacturing plants in Mexico entirely operated by Chinese firms exporting directly to the U.S. while benefiting from NAFTA’s advantages. A similar situation is unfolding in Türkiye,” he noted.

Chinese firms are already investing in Türkiye to sidestep EU tariffs and regulations:

• BYD, a major Chinese automaker, is reportedly planning a $1 billion investment in Türkiye.
• Chery, another Chinese automotive giant, is in talks to establish a production facility in Türkiye.

“The primary motive behind these investments is to circumvent potential EU tariffs and leverage Türkiye’s free trade agreement with the EU,” Scott concluded.

As global trade shifts under Trump’s tariff policies, Türkiye is positioning itself as a key outsourcing destination for both American and Chinese firms, offering a cost-effective and logistically strategic alternative to China.