$1 Billion Hit: Western Sanctions Disrupt Turkey-Russia Trade

Written by Camilla Jessen

Apr.05 - 2024 2:09 PM CET

Photo: Quetions123 / Shutterstock.com
Photo: Quetions123 / Shutterstock.com
Amid growing Western sanctions, trade between Turkey and Russia faces significant disruptions, affecting crucial exports.

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The trade dynamics between Turkey and Russia are experiencing notable shifts as Western sanctions begin to bite, disrupting what has been a vital supply route for Moscow. Bloomberg reports that the intensified sanction lists and restrictions on items with potential military applications are causing a slowdown in trade, particularly impacting machinery exports from Turkey to Russia.

A Significant Blow to Exports

Kutlu Karavelioglu, chairman of the Machinery Exporters Association, voices concerns over the "vague" and "rapidly growing" sanctions lists, coupled with restrictions on goods with potential military applications. These challenges are poised to slash Turkey's machinery sales to Russia by a third compared to last year, translating to a $1 billion downturn in 2023.

The sectors most affected include machine tools, pumps, and electric motors, indicating a broad impact across Turkey's industrial equipment manufacturing landscape.

"It seems impossible for any serious industrial equipment manufacturer to maintain its previous interest in Russia in the face of increasing pressure on the banking system and supply chains," he remarked.

The slowdown in trade not only poses difficulties for Turkish companies but also complicates the Turkish government's efforts to mitigate the current account deficit.

Additionally, the situation underscores the growing effectiveness of US and EU sanctions against Russia, demonstrating their impact even on non-EU countries like Turkey. Preliminary data from the Turkish Ministry of Trade indicates a 33.7% decrease in exports to Russia in the first quarter compared to the previous year.

Reflecting on Trade Trends

The decline in trade between Turkey and Russia is a clear reflection of the broader global stance against Moscow's actions, particularly in light of the ongoing geopolitical tensions. February's figures showed a 33% decrease in deliveries from Turkey to Russia, amounting to $670 million compared to $1 billion in the same period in 2023.

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