Aegean Textile Manufacturers Seek Advantages in the US Market
The new customs tariffs imposed by the U.S. have placed Turkiye in a more advantageous position compared to its competitors, while the textile sector of the Aegean region aims to grow in the U.S. market through the Turquality project and the “Far Countries Strategy.” President Jak Eskinazi emphasized that, despite exchange rate and financing issues, they are optimistic about 2025.
Aegean Exporters’ Associations Coordinator President and Aegean Textile and Raw Materials Exporters’ Association President Jak Eskinazi
The 2024 regular financial general assembly meeting of the Aegean Textile and Raw Materials Exporters’ Association was held. Aegean Exporters’ Associations Coordinator President and Aegean Textile and Raw Materials Exporters’ Association President Jak Eskinazi stated, “Recent developments show how accurate the work of our Turquality promotion project, which we launched with the participation of all relevant Associations, to increase our exports to the U.S. and promote our sector, has been. U.S. President Donald Trump announced new additional customs duties to be applied to many countries, especially China and Vietnam. Turkiye is among the countries where a 10% customs duty will be applied. In the U.S. tariff list, our country is in the group of countries with the lowest additional tariffs, and due to higher tax rates applied to competitor countries, we will need to strengthen our trade activities towards the U.S. and navigate the new trade order emerging from customs tariffs with a clear roadmap.”
New Tax Regulations and Turkiye’s Far Countries Strategy
President Eskinazi continued, “The statements made by our Minister of Trade, Mr. Ömer Bolat, also indicate positive developments for our sector. Turkiye will start implementing comprehensive action plans such as the ‘Far Countries Strategy,’ which includes the U.S., and preparations for various sectors such as textiles, ready-to-wear, and machinery. As a result of these actions, opportunities will arise to further liberalize trade between Turkiye and the U.S. I believe we will see the positive results of these comments specifically related to our sector. We also evaluated how the new additional taxes of the U.S. would affect our sector based on product groups; for example, the tax rate for silk fiber and yarn or flax, hemp fiber and yarn, which is currently 0, will now be subject to a 10% tax when sent to the U.S. Additionally, for products like bed sheets, where tax rates range from 2.5% to 20.9%, an additional 10% tax will be applied.”
“The Additional 10% Tax May Be Perceived Negatively, but We Are at an Advantage”
Jak Eskinazi stated, “Initially, the added 10% additional tax may be perceived negatively, but when compared to the tax rates applied to our competitors, we can see that we are in a more advantageous position. For example, Pakistan, which currently has a 15% tax, will face an additional 29% tax, while India, with a 15% tax, will face an additional 26% tax. The same applies to ready-to-wear clothing; for example, the current tax on cotton knitted T-shirts is 16.5% from the U.S., and for cotton men’s denim pants, it is 16.6%, but an additional 10% tax will be applied. However, the tax rates for our competitors are much higher; for instance, China, which currently has a 50% tax, will see the total rise to 84% with the additional tax. Bangladesh’s current tax is 15%, and with the additional tax, it will reach 52%. Vietnam’s current tax is 15%, and with the additional tax, it will rise to 61%.
Despite Recent Increases in Exchange Rates, Inflation Has Decreased
Another issue is that, as you know, exporters are going through tough times due to rising costs caused by the fact that currency exchange rates have not increased in line with inflation.”
President Eskinazi continued, “We have communicated many concerns to the Ministry of Treasury and Finance, but as you know, due to the widespread belief that ‘if exchange rates rise, inflation will increase,’ the expected solution was not reached. However, despite recent increases in exchange rates, inflation has decreased. As I have stated everywhere, Turkiye has become a 40-50% more expensive country compared to its competitors. As exporters, we are struggling with inflation and parity, and in 2024, we faced significant difficulties in accessing finance. We foresee that 2025 will not be easy, but we will continue our efforts with the hope that, with new developments and the positions we will take, we will have a better year.”
