Economy
For 1st time in decade, voters prefer Democrats over Republicans on economy
Americans see Democrats as better on the economy than Republicans for the first time in nearly a decade, according to a poll, as U.S. President Donald Trump’s approval rating slides.
The finding, in a Reuters/Ipsos poll conducted Wednesday through Monday, showed how Trump’s handling of the economy, including rising energy prices resulting from the Iran war, could weigh on his party’s chances in the November midterm elections that will determine control of Congress for the next two years.
Trump’s presidential approval rating fell to 35% from 37% in a prior poll conducted last month, with the share of Americans who give his presidency a thumbs up within just one percentage point of the lowest level of his term.
Some 37% of registered voters responding to the poll said the Democratic Party has a better approach to the U.S. economy, compared with 36% who picked the Republican Party. Another 27% said they were not sure or that a different party would do a better job.
Republicans had held the advantage on the economy through most of Trump’s first term in office in 2017-2021, through all of Democratic President Joe Biden’s four years in power and into Trump’s second term.
A Reuters/Ipsos poll that concluded in May 2017 gave Democrats an edge, though the question was asked differently, with no option for respondents to say they were not sure or that a different party would do better.
Deteriorating Republican edge
The Republican edge on the economy has steadily deteriorated during Trump’s current term, narrowing to zero in recent months as U.S. household finances suffered from soaring gasoline prices following the U.S.-Israeli attacks on Iran in February and the war that has been simmering ever since.
Trump has said he ordered the strikes and ensuing conflict to dismantle Iran’s nuclear program, curb its ability to attack regional rivals and create conditions for Iranians to overthrow their clerical rulers. But gasoline prices have surged by more than 25% since the war started, with Americans on average paying more than a dollar extra per gallon at the pump.
The poll, which was conducted online and nationwide, found 42% of registered voters would vote for a Democrat in congressional elections and 37% would vote Republican if the contest were held now.
Independents in the poll picked Democrats over Republicans by 12 percentage points. Republicans will be defending narrow congressional majorities in the November 3 elections.
While the poll presents a picture of the national political mood, the actual elections for the U.S. Congress are more complex. Of the 435 House of Representatives seats, only about three dozen are expected to be competitive, while about eight Senate seats are expected to be competitive.
Trump has repeatedly dismissed widespread polling showing Americans unhappy with his leadership. On Monday morning, ahead of the release of the latest poll, he posted to his Truth Social account: “My REAL Polling Numbers, not those made up by the Fake News Media, are the best they have ever been.”
The Reuters/Ipsos poll gathered responses from 4,505 U.S. adults and had a margin of error of 2 percentage points.
Twenty-five U.S. states, almost all led by Democrats, sued the Trump administration on Monday over its latest wide-ranging tariffs imposed on dozens of countries, including key trading partners, arguing that the president had exceeded his authority.
The states filed suit at the U.S. Court of International Trade in New York, asking that judges halt the implementation of the tariffs, declare them unlawful and order the government to issue refunds.
“There is no rational fit between the purported problem of forced labor in international supply chains and the blanket global tariffs the USTR imposed,” the coalition of states argued in a court filing, referring to the U.S. Trade Representative’s office.
The challenge is related to Trump’s latest salvo of tariffs in a range between 10% and 12.5% imposed against 60 trading partners last month.
The tariffs were imposed after probes by the USTR’s office over allegations of “forced labor,” conducted under Section 301 of the Trade Act of 1974.
Since taking office for his second term, Trump has upended global trade by imposing wide-ranging tariffs, at times reaching eye-watering levels on Washington’s friends and foes alike.
Trump has argued that U.S. trading partners have been taking advantage of the world’s largest economy, and has sought to use tariffs as leverage to strike new trade deals.
On Monday, the White House hit back at the latest challenge to Trump’s tariffs, arguing that the government’s move was legal.
“The United States is using its lawful authority to obtain the elimination of unreasonable acts, policies, and practices that burden US commerce,” said Kush Desai, a White House spokesperson, in a statement.
“Section 301 tariffs have proven to be a legally durable tool since the President’s first term, and they remain so now.”
Earlier challenges
Trump’s first round of tariffs, imposed under the International Emergency Economic Powers Act (IEEPA), was struck down by the US Supreme Court in February.
He replaced those with a 10% global levy, which expired in July.
The new Section 301 tariffs replaced that levy, taking effect as the 10% tariff expired on July 24.
Of the 25 states in the suit, 23 have Democratic governors while two, Nevada and Vermont, are led by Republicans.
In their court filing, the states argued that the Section 301 probes were “a pretextual and unlawful effort to exert unfettered tariff power.”
The document lays out a timeline of Trump administration officials’ statements, arguing that the investigations were rushed and prejudged when they were initiated.
“The Tariff Action is arbitrary, capricious, and contrary to law,” the complaint says.
“The Plaintiff States oppose forced labor in all its forms and support protections for workers around the globe. But the Administration cannot use forced labor as a pretext to continue its illegal tariff scheme.”
Trump’s separate sector-specific tariffs, imposed under different legal authorities on steel, automobiles and other goods, have been unaffected by recent legal challenges.
E-commerce and tech giant Amazon hit a $3 trillion market valuation for the first time Monday, marking a new milestone for the company following a rise in its shares for a second straight session after last week’s strong earnings report.
Shares of the tech giant were up 5.2% at $285.75 in early trading, lifting the company’s valuation to about $3.1 trillion.
Amazon posted quarterly profits of more than $62 billion thanks to huge increases in two artificial intelligence-related divisions: the AI cloud business and chips.
The company’s cloud business, Amazon Web Services (AWS), posted a 37% jump in revenue to reach $42.2 billion, prompting CEO Andy Jassy last week to predict it could be a “trillion-dollar annual revenue business for us in time.”
Amazon, Microsoft, Alphabet and Meta Platforms are collectively on track to pour around $700 billion into AI data centers, chips and computing infrastructure this year.
Giovanni Mazzariello, equity specialist at UniCredit, described last week’s results from Amazon and other AI “hyper scalers” as “broadly reassuring.”
“Taken together, rapid revenue growth, widening margins and a swelling backlog from all four hyperscalers, provide the clearest evidence that utilization and monetization are rising fast enough to absorb the growing depreciation and operating costs of the infrastructure build-out,” Mazzariello said.
Consumer price growth in Türkiye cooled more than expected in July, according to official data released Monday.
Annual inflation eased for a second consecutive month to 31.75% from 32.1% in June, the Turkish Statistical Institute (TurkStat) said.
The decline in inflation had stalled following a sharp rise in energy prices caused by the Iran war.
Monday’s data showed the disinflation trend continued despite the challenging global conditions, Treasury and Finance Minister Mehmet Şimşek said.
In a post on X, Şimşek emphasized that the rigidity in service inflation has been broken and that the government would not compromise on fiscal discipline.
On a monthly basis, consumer prices increased 1.78%, accelerating from a 0.99% rise in June, TurkStat said.
Both annual and monthly figures came below market expectations.
The data showed the consumer price index (CPI) rose 19.86% compared with December 2025, while the 12-month moving average increase stood at 31.9%.
“Despite unprocessed food and administrative prices pushing inflation higher, softer inflation in several non-food categories drove the downside surprise,” said analysts at the Dutch financial giant ING.
Among the three expenditure groups with the largest weights, annual prices increased 40.32% for housing, water, electricity, gas and other fuels, 37.53% for food and non-alcoholic beverages, and 30.83% for transportation.
Food and non-alcoholic beverages contributed 8.94 percentage points to the annual inflation rate, transportation 5.22 points, and housing 5.21 points.
Year-over-year inflation for education and rent fell by 31 percentage points and 34 percentage points, respectively, Şimşek said.
“Thanks to the measures we have taken and the impact of the disinflation process, inflation in the services sector is becoming less persistent,” he noted.
“While effectively managing risks stemming from geopolitical developments, we are not compromising on fiscal discipline or our goal of sustainable price stability.”
Limiting geopolitics’ inflationary impact
On a monthly basis, transportation prices rose 2.59%, housing costs increased 2.25%, and food and non-alcoholic beverage prices climbed 1.61%, the TurkStat data showed.
Vice President Cevdet Yılmaz said the temporary acceleration in monthly inflation reflected higher oil prices following renewed U.S.-Iran hostilities, adjustments in administered prices and increases in fresh fruit and vegetable prices.
He added that annual inflation in core goods declined to 16.82%.
Domestic energy prices, which had fallen in May and June, rose in July, led by fuel and electricity costs amid geopolitical developments, Yılmaz said on the Turkish social media platform NSosyal.
“We will continue to implement supply-side reforms alongside monetary and fiscal policies to strengthen the purchasing power of our citizens and achieve a sustainable increase in welfare in line with our goal of lasting price stability,” he said.
Yılmaz added that Türkiye would maintain measures aimed at limiting the inflationary impact of geopolitical developments.
The Central Bank of the Republic of Türkiye (CBRT) raised its end-2026 inflation forecast to 24% from 16% in its quarterly inflation report published in mid-May, saying the short-term inflationary effects of the Iran war would remain “pronounced.”
The bank projects inflation falling to 15% at the end of 2027 and 9% at the end of 2028.
According to analysts at ING, uncertainty surrounding oil prices, along with their spillover effects on other commodity prices, continues to pose risks to the inflation outlook.
They also said the government’s decision to gradually unwind the sliding scale mechanism adds to the challenges.
Launched in March, the mechanism allows reductions in the special consumption tax (ÖTV) to offset increases in global oil prices and limit their impact on domestic fuel prices and inflation.
PPI at 5-month low
Monday’s TurkStat data also showed the domestic producer price index (PPI) stood at 1.5% in July, easing from a 1.8% pace in June. More than half of the monthly increase was driven by electricity and gas production.
On an annual basis, it dropped to 27.8%, the lowest in the last five months.
“Global commodity prices and particularly oil prices in the current geopolitical backdrop will remain the key risk factors to the PPI, which is on a gradual uptrend,” said analysts at ING.
Türkiye’s manufacturing sector improved slightly in July but remained in contraction, as subdued market conditions and softer domestic and international demand prompted firms to cut output and jobs, a business survey showed on Monday.
The Istanbul Chamber of Industry (ISO) Türkiye Manufacturing PMI, compiled by S&P Global, rose to 47.7 in July from 47.1 in June, the survey showed. The 50-mark separates growth from contraction.
Last month signaled a further solid moderation in the health of the manufacturing sector, said the panel, adding that business conditions have now eased in 28 successive months.
“The second half of 2026 began in much the same way as the first half ended, with Turkish manufacturers struggling to generate growth amid a muted demand environment, exacerbated by the war in the Middle East,” said Andrew Harker, economics director at S&P Global Market Intelligence.
New orders fell markedly again, though the pace of decline eased slightly from June. Firms linked softer demand to subdued market conditions and price pressures, while the war in the Middle East weighed on export demand.
Production declined for a second straight month, although only modestly, the survey showed. Employment also fell, with some firms citing workers resigning from their positions.
Purchasing activity and inventories were reduced in response to muted demand, the survey showed.
Inflation pressures softened further in July. Input costs rose at the slowest pace since November 2025, while the rate of increase in output prices was the weakest so far in 2026.
“Manufacturing production did at least moderate to a lesser degree than in June, signalling a more stable picture. Also positive was a further easing in the rate of input cost inflation which provided some breathing space for firms to limit rises in selling prices in order to try to stimulate demand,” S&P Global’s Harker said.
Türkiye’s state-owned oil and gas giant is widening its international footprint from onshore production to offshore exploration, following its entry into a major oil project in Iraq’s Kirkuk region with a new stake in an offshore Black Sea block in Bulgaria.
The latest moves advance Ankara’s strategy of expanding overseas operations of Turkish Petroleum Corporation (TPAO) through partnerships with international energy companies as it seeks to strengthen energy security and build a larger global production portfolio.
Energy and Natural Resources Minister Alparslan Bayraktar has repeatedly said this year that Türkiye aims to transform TPAO into a more prominent energy producer.
Under the strategy, the company is targeting production of around 500,000 barrels of oil equivalent per day by 2028, with a longer-term goal of increasing output to 1 million barrels per day.
Bulgaria venture expands offshore exploration
TPAO’s entry into Bulgaria became official after the Bulgarian Council of Ministers approved the partnership agreement last week, following its signing on Feb. 18.
The approval gives TPAO a 33% stake in the exploration license for the Khan Tervel Block 1-26, located in Bulgaria’s exclusive economic zone in the Black Sea.
Under the partnership, Shell will operate the project with a 42% interest, while OMV holds the remaining 25%.
Covering roughly 3,800 square kilometers, the block lies close to Türkiye’s Sakarya Gas Field, home to the country’s largest-ever natural gas discovery.
Bayraktar has said the first phase of the project will involve seismic surveys jointly conducted with Shell, followed by exploratory drilling under a five-year exploration license.
The project is expected to allow TPAO to leverage the deepwater exploration and production expertise it gained at the Sakarya field while expanding its offshore operations and strengthening technical cooperation with international energy companies.
Kirkuk partnership strengthens onshore portfolio
The Bulgaria investment follows TPAO’s expansion into Iraq through a consortium developing several of the country’s largest oil fields.
Under that agreement, announced nearly a week ago, TPAO acquired a 15% stake alongside BP and ConocoPhillips in the consortium developing the Baba and Avanah domes and the Bai Hassan, Jambur and Khabbaz fields in Iraq’s Kirkuk region.
According to the latest field-level production data published by Iraq’s Extractive Industries Transparency Initiative (EITI), the fields currently produce around 300,000 barrels of oil per day.
The project’s initial phase is estimated to encompass more than 3 billion barrels of oil equivalent, while the wider contract area is believed to hold resource potential of up to 20 billion barrels of oil equivalent.
Energy analysts view the investment as strategically important both for expanding TPAO’s overseas production capacity and supporting Türkiye’s broader ambitions to strengthen energy security and position itself as a regional energy hub.
Global partnerships gather pace
Alongside its projects in Iraq and Bulgaria, TPAO has expanded cooperation with several of the world’s largest energy companies this year.
In January, the company signed a memorandum of understanding with ExxonMobil subsidiary ESSO Exploration International Limited covering potential oil and natural gas exploration in the Black Sea, the Mediterranean and other prospective regions.
A month later, it reached a separate agreement with Chevron to cooperate on upstream oil and gas exploration and production projects in Türkiye and abroad.
TPAO also signed a strategic cooperation agreement with BP in the oil and natural gas sector, followed by a memorandum of understanding with TotalEnergies in April to explore joint exploration opportunities in the Black Sea and international markets.
The agreements complement TPAO’s ongoing exploration and production activities at strategic domestic fields including Gabar and Sakarya, while expanding its overseas presence across both offshore exploration and onshore production.
Moving beyond being only transit route
Osama Rizvi, an energy and economics analyst at U.S.-based Primary Vision Network, said TPAO’s expansion into Bulgaria following the Kirkuk investment strengthens Türkiye’s role beyond that of a traditional energy transit country.
“This moves Türkiye beyond being only a transit route. By owning stakes in production, Türkiye gains revenue, supply options and influence across exploration, production, pipelines, trading and refining. This creates asset-based leverage, not just geographic leverage,” Rizvi told Anadolu Agency (AA).
Francesco Sassi, a postdoctoral researcher at the University of Oslo, said TPAO has significantly broadened its international activities in recent years and has become an increasingly important instrument of Türkiye’s energy diplomacy.
“TPAO has become a relevant player in Türkiye’s energy diplomacy, a significant aspect of Ankara’s increasingly ambitious foreign policy,” Sassi said.
“Many of these developments suggest that Ankara’s maritime ambitions – the concept of the Blue Homeland (‘Mavi Vatan’) – are indeed connected to energy interests and needs, in addition to projecting Türkiye’s influence across the broader region,” he added.
According to Sassi, future exploration and development projects in the Black Sea, particularly those involving European energy companies, could further raise TPAO’s international profile while supporting Türkiye’s long-term energy objectives.
Turkish exporters set three records in July, including the highest-ever July shipments, annualized exports and total goods and services sales, Trade Minister Ömer Bolat said Monday.
Exports rose 2.9% year-over-year to $25.6 billion in July, the second-highest monthly total to date, Bolat told a press conference in Istanbul.
Imports increased 5.2% to nearly $33 billion, official data showed.
The foreign trade deficit widened 14% to $7.37 billion, compared with $6.46 billion in July 2025.
Türkiye’s foreign trade volume expanded 4.1% to $58.6 billion.
The export-to-import coverage ratio declined by 1.7 percentage points to 77.7%.
Excluding energy and gold trade, the export-to-import coverage ratio stood at 90.8% in July.
In the first seven months, exports grew 3.4% year-over-year to $161.6 billion, while imports rose 4.7% to $222.1 billion.
The January-July trade gap increased 8.2% to $60.5 billion. Total trade volume rose 4.1% to $383.7 billion.
The export-to-import coverage ratio stood at 72.8%, down from 73.6% in the same period last year.
Annualized exports reached an all-time high of $278.6 billion as of July, increasing 3.4% from the previous 12-month period, Bolat said.
Imports climbed 5% to $375.3 billion. The trade deficit rose 7.4% to $96.8 billion.
Considering that the deficit ended last year with a deficit of $92.2 billion, Bolat said the gap is “under control.”
“Despite all the wars in our region – to the north, east, and south – and the negative impacts on energy and raw materials, price increases, and rising costs in freight, insurance, and transportation, our trade deficit has increased by only $4.4 billion over the past year,” he noted.
Compared to December, there was an increase of $4.55 billion.
“This is a tolerable situation,” said Bolat. “The trade deficit remains under control and continues to show a stable trend.”
Türkiye’s services exports are estimated to have reached $122.6 billion on an annualized basis as of July, he added.
That would lift the annualized exports of goods and services to over $401 billion. Last month, the figure was $400.3 billion.
“This is also a record,” said Bolat. In other words, three record figures were achieved in July.”
The annualized foreign trade volume increased 4.3% to $653.9 billion, while the export-to-import coverage ratio fell to 74.2% from 75.3%.
The data showed Germany was Türkiye’s largest export destination in July, receiving $2 billion worth of goods, followed by the U.S. with $1.7 billion and the U.K. with $1.3 billion.
By broad economic category, exports of intermediate goods totaled $13.3 billion, while consumer goods exports amounted to $7.9 billion and capital goods exports stood at $3.7 billion.
Manufacturing accounted for $24.2 billion of total exports, while agriculture, forestry and fisheries contributed $800 million and mining and quarrying generated $500 million.
Bolat said the euro/dollar exchange rate had worked against exporters in July.
“While it was 1.18 last year, this month’s average of 1.14 resulted in a loss of $300 million for us,” he said.
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