​Trump and Turkey—Initial thoughts

TURKEY - In Brief 09 Nov 2016 by Atilla Yesilada

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Even though Trump has barely made a foreign policy speech, I know markets wait for no man and my audience demands to know how Trump would sit with Turkey. I’m committing my initial thoughts to writing, warning the readers that these are sketchy and prone to large margins of error. I’ll update in the Weekly Tracker. Erdogan immediately called Trump to congratulate him on his victory while according to Turkish press, VP-elect Pence promised Turkish businessmen in a dinner meeting better relations with Turkey. Ankara is happy with Trump, because It is considered that he is more likely to extradite or isolate Gulen,He has uttered phrases in defense of a safe zone in Syria—Turkey’s pet thesis.It is rumored that a member of his transition team promised Ankara to review relations with Syrian Kurds if affiliation with PKK can be proven.He is more likely to ignore human rights violations in Turkey. If you ask me, all of these are too much wishful thinking or reading between the lines. Trump doesn’t know what he is going to do with his presidency, the contours of which will largely be shaped by his staff and his initial encounters with key issues and partners. I think Trump is a net-net negative for EM at large and Turkey in specific. I’ll elaborate more in the Weekly, but the chances of him imposing trade restrictions on select countries are not low. His tax cut and infrastructure spending plan could overheat the economy, causing the Fed to escalate rate hikes in 2H2017, which would really hurt Turkey. I really don’t know what he plans to do in the Middle East. From Merkel to Obama, everybody tried to work with Putin but gave up at the end in the face of his intransigence. It i...