Economy
Türkiye ‘quietly’ emerging as naval power: Belgian defense minister
Türkiye is becoming a maritime power while the world focuses on the naval arms race between China and the U.S., Belgian Defense Minister Theo Francken said Tuesday.
“While all eyes are focused on the naval arms race between China and the U.S., Türkiye is quietly emerging as a maritime power,” Francken wrote on the social media platform X.
He is part of a delegation accompanying Belgium’s Queen Mathilde, who arrived in Istanbul on Sunday, leading a high-level economic mission aimed at strengthening trade and investment ties between Brussels and Ankara.
Francken’s remarks came after the delegation visited Sedef Shipyard in Istanbul.
He pointed to how Türkiye is not only ordering but also domestically building submarines, corvettes, frigates, destroyers and aircraft carriers.
“They are doing so quickly, with high quality and competitive prices. Turkish naval vessels are gradually gaining ground on the global market,” he added.
The delegation on Sunday visited the Turkish drone powerhouse Baykar, which Francken described as “unique” within NATO because “it has made permanent innovation its mantra.”
“This company pioneered AI-integrated armed drones. They are getting higher and flying higher and further,” he said.
Before the visit, Francken praised Türkiye’s defense industry as a “role model.” He said Belgium sees major potential for cooperation with Türkiye in the defense sector.
On Tuesday, Francken noted that the Turkish economy has grown rapidly over the past 20 years while also managing to emerge from the inflation storm it experienced in recent years. He said one lesson he took away was that “hard times require hard measures.”
“Istanbul is not only a gateway to Central Asia, but also to the Arab world – including in the media sphere. All major Arab media outlets are represented here,” Francken added.
U.S. consumer prices accelerated further in April as Washington’s war with Tehran continued to push energy prices higher, adding to pressures for many households.
The consumer price index (CPI) rose 3.8% from April 2025, according to data released by the Labor Department on Tuesday.
On a month-to-month basis, April prices rose 0.6% from March as gasoline prices rose 5.4% during the month. However, the month-over-month gain was down from 0.9% increase from February to March.
Labor Department figures showed that gasoline prices are up more than 28% compared with a year ago. However, the AAA motor club listed the average regular gallon of gasoline at above $4.50 on Tuesday, about 44% more than it cost last year at this time.
Excluding volatile food and energy costs, so-called consumer core prices rose 0.4% last month from March and 2.8% from April 2025, relatively modest readings that suggest the energy price burst has yet to spill over more broadly into other prices.
Grocery prices rose 0.7% from March to April as meat prices rose. Those prices had retreated slightly the month before.
‘Key drag’ on economy
“Inflation is the key drag on the U.S. economy now,” Heather Long, chief economist at Navy Federal Credit Union, wrote.
“There is a real financial squeeze underway. For the first time in three years, inflation is eating up all wage gains. This is a setback for middle-class and lower-income households and they know it. They are having to cut back on spending and stretch every dollar.”
In April, average hourly wages fell 0.3% from a year earlier after accounting for inflation – the first year-over-year drop in three years.
Inflation had been dropping more or less steadily since peaking with a 9.1% year-over-year spike in prices in June 2022, a surge caused by supply chain bottlenecks at the end of COVID-19 lockdowns and an energy price shock following the Russian invasion of Ukraine. But inflation remained above the 2% target set by the Federal Reserve (Fed).
Then, the United States and Israel attacked Iran on Feb. 28, and Tehran responded by shutting off access to the Gulf of Hormuz, through which a fifth of the world’s oil and liquefied natural gas passes. Energy prices rocketed in response.
The Fed, which had been expected to cut its benchmark interest rates in 2026, has turned cautious as it waits to see how long the conflict lasts and whether higher energy prices spill over into other products and cause a broader inflationary outbreak.
President Donald Trump has lambasted the Fed and its outgoing chair, Jerome Powell, for refusing to slash rates to boost the economy.
Kevin Warsh, the president’s hand-picked choice to succeed Powell, is expected to be confirmed by the Senate this week, but it’s unclear whether Warsh would pursue lower rates given the uncertainties arising from the war – or whether he could persuade his colleagues on the Fed’s rate-setting committee to go along if he tried.
Some companies are also starting to feel the pain.
For example, Whirlpool, which makes KitchenAid and Maytag appliances, reported last week that revenue dropped nearly 10% in its most recent quarter and said that the war has caused a “recession-level industry decline″ that has undermined consumer confidence.
Grace King, 31 of Ames, Iowa, said that higher prices in the food aisle and at the pump are making her cut back on spending for things like clothing. The administrative assistant used to spend $200 per month on clothing, mostly on Amazon, but not anymore.
“There’s pressure basically everywhere from the groceries that I buy to the gas to fill up the tank,” she said.”
“I’ve severely cut back on my frill spending.”
For example, King noted that while it’s only a five-minute drive to work, she makes the trip twice a day. And if she needs to do any big shopping, that’s a 40-minute drive to malls in Des Moines, Iowa.
Online marketplace eBay announced Tuesday that it had rejected the recent $56 billion takeover offer from video game retailer GameStop, calling the unsolicited proposal “neither credible nor attractive.”
“eBay’s board is confident that the company, under its current management team, is well positioned to continue to drive sustainable growth, execute with discipline, and deliver long-term value for our shareholders,” board chairperson Paul Pressler said in a statement.
GameStop, well known among American gamers but a much smaller company than eBay, made its stock-and-cash deal in early May.
Analysts quickly expressed doubts that it would be able to finance the deal, though its CEO, Ryan Cohen, said in a television interview that “we have the ability to issue stock to get the deal done.”
GameStop has roughly $9.4 billion in available assets and said it had secured a commitment letter from the Canadian investment firm TD Securities for $20 billion in financing.
Its offer valued eBay at $125 per share, but in a sign that investors were sceptical of its success, eBay shares closed at just $108.13 on the Nasdaq composite on Monday.
In its statement, Pressler said, “We have sharpened our strategic focus, strengthened execution, enhanced our marketplace and seller experience, and consistently returned capital to shareholders.”
Turkic nations will focus on new steps to advance their economic ties through artificial intelligence and digital development at the leaders’ summit in Kazakhstan this week.
The informal summit of the Organization of Turkic States’ (OTS) Council of Heads of State will be held on Friday in the southern Kazakh city of Turkistan under the theme “Artificial Intelligence and Digital Development.”
The meeting will focus on AI and digital innovation while promoting sustainable economic growth through the transformative potential of new technologies.
The summit will be a platform to advance dialogue to improve public services and enhance regional connectivity, such as joint activities that Turkic nations can take in developing Turkish AI.
The event is also expected to contribute to strengthening economic and commercial relations among member states.
President Recep Tayyip Erdoğan is also expected to attend the summit, an Anadolu Agency (AA) report on Tuesday said.
Türkiye’s annual OTS trade nears $17 billion
The evaluations to be made at the OTS summit are expected to contribute to economic and trade relations. In recent years, Türkiye has maintained a position of a net exporter to the member countries of the organization.
Turkish exports to Azerbaijan, Kazakhstan, Kyrgyzstan and Uzbekistan were recorded at $6.2 billion (TL 281.41 billion) in 2021, with imports totaling $4.2 billion. In 2022, exports amounted to $6.9 billion, while imports were $6.2 billion.
A year later, Türkiye’s exports climbed to $8.8 billion, with imports reaching $6.4 billion. The said exports reached $10 billion in 2024, while imports from these countries were recorded at $6.5 billion.
Last year, Turkish exports totaled $9.6 billion, and the import amount was calculated at $7.3 billion. Thus, the annual trade volume between Türkiye and the OTS member countries approached $17 billion.
Most exports to Kazakhstan
Looking at exports from last year by country, Kazakhstan ranked first with $3.2 billion.
Azerbaijan followed with $3 billion, Uzbekistan with $2.1 billion and Kyrgyzstan with $1.3 billion.
In the first three months of this year, Türkiye’s exports to member countries also approached $2.1 billion. Kazakhstan led the way with approximately $700 million.
Azerbaijan followed with $663 million, Uzbekistan with $419.5 million and Kyrgyzstan with $274.7 million.
Within the OTS, in addition to member countries, Turkmenistan, Hungary, the Turkish Republic of Northern Cyprus (TRNC) and the Economic Cooperation Organization (ECO) are present as observer countries.
New opportunities on the table
Meanwhile, besides the OTS summit in Turkistan, meetings and conferences are planned in Astana to elevate Türkiye-Kazakhstan relations to a higher level.
Erdoğan is expected to chair the High-Level Strategic Cooperation Council Meeting with his Kazakh counterpart Kassym-Jomart Tokayev on May 14.
In addition, the Türkiye-Kazakhstan Business Forum is also expected to take place, with the attendance of Trade Minister Ömer Bolat alongside business leaders from the two countries, to explore cooperation areas.
The U.S. and Japan maintain “constant and robust” coordination in tackling undesirable, excessively volatile currency moves, U.S. Treasury Secretary Scott Bessent said on Tuesday after meeting his Japanese counterpart during a visit to Tokyo.
The remarks suggest Washington broadly consents to Japan’s recent round of yen-buying intervention aimed at propping up its sagging currency, which is inflicting pain on the economy by pushing up import costs.
“I was pleased to reaffirm the strong economic partnership between the United States and Japan,” Bessent said on X.
The comments came just hours after Japanese Finance Minister Satsuki Katayama told reporters the two had reaffirmed close efforts in tackling exchange rate moves, including currency intervention.
“The level of communication and coordination between our teams in addressing undesirable, excess volatility in currency markets continues to be constant and robust,” Bessent added.
The dollar rose to about 157.72 yen after Bessent’s remarks, which fell short of market expectations for stronger warnings on sharp declines in the yen, before dropping abruptly to 156.74 yen.
It was not immediately clear if the rise was due to intervention.
“Markets wanted to know whether there was no change in Bessent’s stance on Japan’s monetary policy,” said Yuji Saito, executive adviser to SBI FX Trade. “There was not much new for markets from Bessent’s comment on X.”
Japan’s response to currency moves in line with U.S. pact
Katayama said she confirmed with Bessent that Japan was responding to currency moves in line with a joint statement signed with the U.S. last September that allowed for foreign exchange intervention to combat excessive market volatility.
“Given current circumstances, we strongly confirmed anew the need to continue coordinating closely on market moves,” she said when asked whether Bessent had commented on recent suspected currency intervention by Japan to support the yen.
“We engaged in discussions on deepening our coordination on various fronts,” Katayama added, in response to a query whether “close coordination” meant that Washington could take the initiative in tackling sharp falls in the yen.
Silence on BOJ
Japanese policymakers are wagering that an endorsement from Bessent on their foray into the currency market could give their intervention some extra bite and help slow the yen’s slide.
Some analysts have also speculated that Bessent might renew his calls for speedier rate hikes by the Bank of Japan (BOJ) as a way to support the yen.
Katayama declined to comment when asked whether the meeting with Bessent touched on the BOJ’s monetary policy. Bessent has not made any comment yet on the BOJ.
BOJ Governor Kazuo Ueda returns to Tokyo on Wednesday from a visit to Switzerland for a meeting of the Bank for International Settlements. It is uncertain if Ueda will return in time to meet Bessent, who is set to wrap up his three-day visit that day.
With the war-induced oil price spike intensifying price pressures, some BOJ policymakers argued in April that rates may need to rise soon, with one flagging the chance of a June move, a summary of opinions at last month’s meeting showed.
Japan has also flagged the possibility of stepping into oil futures markets as it sees speculative surges in energy prices as a major driver of the yen’s weakness against the dollar, but Katayama clarified on Tuesday that it had taken no such step yet.
Bessent also met Ryosei Akazawa, Japan’s minister for economy, trade and industry, and agreed to strengthen ties in the fields of energy and critical minerals.
A cargo of crude oil loaded from the U.S. Strategic Petroleum Reserve (SPR) is heading to Türkiye, the first shipment of U.S. emergency reserve oil to the Mediterranean country, ship tracking data showed.
The U.S. is in the process of releasing 172 million barrels from the SPR in a bid to combat spiking crude prices, as the war in Iran has upended global supplies, with the critical chokepoint, the Strait of Hormuz, remaining largely closed.
The move is part of a coordinated effort by the International Energy Agency (IEA) to release a record 400 million barrels of oil to quell rising prices.
Exports from the U.S., the world’s largest producer, have touched record highs as supplies across Europe and Asia have tightened, sending prices higher.
Greek-flagged aframax North Star loaded around 680,000 barrels of sweet crude from the Bryan Mound strategic petroleum reserve site near Seaway, Texas City, in April and is set to arrive in Aliağa, Türkiye, in mid-May, Kpler data showed, citing a bill of lading.
And Hong Kong-flagged DHT Antelope loaded about 1.1 million barrels of Bryan Mound Sour crude oil at offshore Galveston through ship-to-ship transfer in late April, and is also due to unload in Türkiye at the end of the month, according to ship tracking data and a trader. The ship also carried another parcel of U.S. crude, Kpler data showed.
U.S. SPR cargoes have already headed to Italy and the Netherlands, according to ship tracking data.
Top Turkish and Belgian officials on Monday highlighted “significant” opportunities to deepen economic cooperation in defense, technology, logistics and green energy, while reaffirming their goal of significantly increasing bilateral trade.
The remarks came during a business forum in Istanbul attended by more than 400 private-sector representatives as part of an economic mission led by Belgium’s Queen Mathilde. Turkish Trade Minister Ömer Bolat has described it as the largest international delegation visit to Türkiye to date.
Queen Mathilde, later Monday, was received by President Recep Tayyip Erdoğan, who said recent regional developments have once again highlighted the geopolitical importance of Türkiye-EU relations, according to a statement released by the Communications Directorate.
During the talks that covered bilateral relations as well as regional and global issues, Erdoğan also stressed updating the customs union in line with current conditions is “a key area necessitating swift progress” on the path toward Türkiye’s full EU membership.
At the forum, officials highlighted opportunities to expand cooperation in areas including defense, technology, green transition and logistics. They also emphasized the importance of modernizing the Türkiye-EU Customs Union and Türkiye’s role as a production and logistics hub for European markets.
The delegation also included Belgian Deputy Prime Minister and Foreign Minister Maxime Prevot and Defense Minister Theo Francken, who is also responsible for foreign trade.
The bilateral trade volume between Türkiye and Belgium reached $9.2 billion in 2025, including $5 billion in Turkish exports and $4.2 billion in imports.
Turkish Trade Minister Bolat said the two countries are aiming to increase the volume to $15 billion in the near term.
He added that priorities include strengthening the legal and business framework through agreements on investment protection, investment promotion and the avoidance of double taxation, ensuring transparency, predictability and security for investors.
Belgian investments in Türkiye totaled $9.3 billion between 2002 and January 2026, while Turkish investments in Belgium amounted to $490 million.
Bolat said 719 Belgian companies currently operate in Türkiye, while Turkish companies are expanding in Belgium across logistics, defense, manufacturing, retail and advanced technologies.
The economic mission is regarded as one of Belgium’s most significant economic diplomacy initiatives with a strong political dimension.
It typically features a range of events centered on key sectors of bilateral economic relations with the host country and aims to promote concrete cooperation opportunities.
Belgium last organized an economic mission to Türkiye in 2012, when the visit was led by King Philippe, then crown prince.
Bolat underscored the sides’ intention to deepen cooperation in strategic sectors, including defense, logistics, energy, technology and advanced manufacturing.
Citing geopolitical tensions, supply chain disruptions and rising protectionism, Bolat described Türkiye as a strategic production and logistics hub connecting Europe, Asia and Africa, offering direct access to a market of more than 1.3 billion consumers.
He highlighted Türkiye’s economic scale, noting its $1.6 trillion economy, young workforce and expanding industrial base. “Türkiye has become a global production, technology and logistics center,” he said.
Highlight on defense
Defense was highlighted as one of the strongest growth areas in bilateral cooperation.
Erdoğan told Mathilde that Türkiye’s participation in the EU’s defense initiatives is in the mutual interest of all sides, the statement said.
The president further said Türkiye and Belgium hold significant potential for cooperation in a broad range of fields, including trade, the defense industry, energy and agriculture, adding that efforts to further strengthen bilateral ties would continue.
He added that the green energy transition represents an important area of cooperation with Belgium, emphasizing that Türkiye is among Europe’s leading countries in installed renewable energy capacity.
The delegation on Sunday visited the Turkish drone powerhouse Baykar, which Belgium’s Francken described as “unique” within NATO because “it has made permanent innovation its mantra.”
“This company pioneered AI-integrated armed drones. They are getting higher and flying higher and further,” Francken wrote on the social media platform X.
Bolat said Türkiye’s defense and aerospace exports rose from $248 million in 2002 to more than $10 billion in 2025, a nearly 40-fold increase that has positioned the country as the world’s 11th-largest defense exporter.
“We see growing interest from Belgium in deeper engagement with our defense ecosystem,” he said.
Customs union update
He also emphasized logistics as another major area of opportunity, citing Türkiye’s $150 billion logistics market and more than $50 billion in logistics service exports.
Türkiye’s transportation infrastructure includes 58 airports and flight connections to 356 destinations, while weekly connectivity between Türkiye and Belgium includes 80 passenger flights and 14 cargo flights, according to Bolat.
More than 600,000 Belgian tourists visited Türkiye last year, he added.
Bolat identified information technologies, pharmaceuticals and clean energy as additional areas where bilateral cooperation could deepen.
He said Türkiye’s energy transition strategy, particularly in offshore wind and hydrogen technologies, presents opportunities for collaboration with Belgian firms.
Bolat also called on the EU to modernize the customs union to support integrated value chains between European and Turkish companies.
“We are working very closely on updating the customs union in line with today’s economic realities,” he said.
Türkiye’s annual trade volume with the EU has reached $233 billion, while nearly 70% of the $290 billion in foreign direct investment entering Türkiye since the early 2000s has originated from European firms, he noted.
As part of the forum, Bolat, Prevot and Francken signed a joint declaration aimed at strengthening bilateral trade relations.
In his speech, Prevot underlined the importance of the EU-Türkiye Customs Union in connecting Turkish industry to European value chains, while stressing that trade was “only one part of the story.”
He said Belgium and Türkiye have “highly complementary strengths” in multiple sectors, including energy, aerospace, defense, logistics, biotechnology and life sciences.
He added that bilateral ties “are built on nearly two centuries of political, diplomatic and economic cooperation.” According to Prevot, existing ties are already strong, but further potential remains in innovation, research and industrial collaboration.
Economic powerhouse
Meanwhile, Turkish Investment and Finance Office head Ahmet Burak Dağlıoğlu said Türkiye has maintained a reform-driven agenda since 2003, regularly updating investment policies and improving the business climate.
“Every 18 to 24 months, we prepare and implement a new reform agenda, gather private sector feedback and launch the next phase of reforms,” Dağlıoğlu said.
“Türkiye is a resilient and fast-growing economy,” he said, noting the country has recorded compound annual growth of 5.3% since 2003.
Dağlıoğlu said Türkiye’s strategic location has turned the country into a major connectivity and logistics hub linking three continents.
Massive infrastructure investments have transformed Türkiye from a regional bridge into a global economic powerhouse, he added.
He also noted that the government recently announced a new package of financial and non-financial investment incentives.
Complementary strengths
Addressing the event, Foreign Economic Relations Board (DEIK) President Nail Olpak said Türkiye and Belgium have complementary economic strengths.
“Belgium is home to world-class companies in pharmaceuticals, chemicals, logistics, high-tech manufacturing and defense,” he noted.
Olpak cited Türkiye’s economic strength in production, technology and research and development, with its role as a global trade hub and consumer market of 86 million people.
He said the green transition presents significant opportunities for cooperation, combining Belgian sustainability expertise with Türkiye’s rapidly growing renewable energy sector.
He also highlighted the potential for cooperation between Belgian high-tech companies and Türkiye’s expanding startup ecosystem.
According to Olpak, defense industry cooperation remains an important and logical area for both countries.
“We all witness that today’s only certainty is uncertainty, which we businesspeople never like,” he said. “The idea of free trade has been transferred to economic blocs as well as political blocs.”
Türkiye’s more than 60-year EU partnership journey should now be viewed from a new perspective, Olpak stressed.
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