ANKARA: The repercussions of U.S. President Donald Trump’s unexpected announcement that he plans to impose 25 percent tariffs on steel imports is stirring global debate.
Global economic imbalances created by the now famous currency wars over the past two decades are at risk of being ramped up again as Trump is now pulling the trigger for global trade wars.
Alongside monetary measures, the government is gearing up for the approval of a gigantic tax amnesty to boost the economy from the fiscal side. Ten million indebted tax payers will bring about 100 billion liras ($26 billion) into the government’s coffers over the next 18 months, the plan foresees. Interest penalties are also being erased. The amnesty will cover traffic penalties, customs tax liabilities, motor vehicles, stamp duty debts, property tax liabilities, student loan debts, contribution loan debts and income tax debts.
Last week, the government also overhauled Turkey’s 33-year-old value added tax system. The new bill means the government will now pay out VAT returns to taxpayers without any major delay, according to Finance Minister Naci Agbal.
The biggest foreign supplier of steel to the United States is Canada, followed by Brazil, South Korea, Mexico, Turkey, the European Union, Japan and Russia. The United States was the largest market for Turkey’s steel exports, with a 12 percent share as of the first quarter of 2017. Thus, Turkey may be negatively affected by Trump’s decision to the tune of $1.1 billion.
Possible retaliatory moves from the European Union and China have been disturbing financial markets across the globe, especially in the light of China’s sway over the price of U.S. Treasuries due to its vast investments there.
