Economy
Türkiye seen as key player for diversifying critical minerals supply chains
Türkiye is emerging as a notable player in efforts to diversify global critical minerals supply chains, backed by its resource base and strategic location, according to a senior official from the Organisation for Economic Co-operation and Development (OECD).
“Türkiye is already an important player in critical minerals,” Marion Jansen, the director of the Trade and Agriculture Directorate at OECD, told Anadolu Agency (AA) on the sidelines of the OECD Critical Minerals Forum in Istanbul.
Jansen highlighted Türkiye’s strength in borates as a major global supplier and noted that the country also holds significant reserves of rare earth elements (REEs). “So this is one of the countries where more investment could take place.”
She noted that Türkiye could play an important role in diversifying critical minerals supply chains and added that its geographic position makes it well placed to facilitate the logistics and transit of critical minerals from different regions.
“Türkiye is situated between Asia, Africa and Europe. This is a fantastic trading hub,” she said.
The country established the Rare Earth Elements Research Institute in 2020 to explore the potential of critical minerals and, in 2022, discovered the world’s second-largest rare earth element reserve in the central province of Eskişehir, giving further momentum to its development in this area.
Risks drive push for diversification
As Türkiye is part of the OECD’s export credit arrangement, it has a role in coordinated international financing efforts. “Türkiye has a voice in this joint collaboration around export credit financing,” Jansen said.
She noted that Türkiye is well integrated into global markets and has the potential to expand its role further. “The potential for Türkiye to play an even bigger role definitely exists,” she added.
Jansen said rising interest in financing the green transition has brought structural risks in critical minerals markets into sharper focus. “The key aspect is diversification.”
As demand for minerals critical to the energy transition, digitalization and defense industries rises, supply remains concentrated among a limited number of countries.
Many critical mineral markets are highly concentrated, with some cases where a single country accounts for up to 90% of global supply, either in extraction or processing.
“This is not good,” she said, warning that excessive concentration distorts markets and prevents normal price formation.
She added that high entry barriers limit new participants, while dominant players may restrict access to materials. “So diversification is important,” she noted.
Jansen stressed that financing mining and processing projects will be essential to improving supply diversity, pointing to OECD’s work in this area, including through export credit mechanisms.
Export restrictions threaten multilateral trade system
Jansen also warned about the increasing use of export restrictions globally.
According to OECD data, export restrictions have increased steadily over the past 15 years, with a notable rise in the most severe measures. The use of such measures increased nearly fivefold between 2009 and 2024 and remains at historically high levels.
“It becomes nearly acceptable to use it and that’s not good news for the multilateral trading system at all,” she said.
Export prohibitions are “used more and more frequently, and this is the third piece of bad news for the trading system of critical raw materials,” she explained.
Investment faces long-term uncertainty
Investment in critical minerals remains challenging due to long project timelines and market uncertainty, Jansen said.
“Investing in this sector is a long-term project … the money has to be invested for the long run,” she said.
She noted that investors seek clarity on returns and price conditions, but risks are higher in concentrated markets.
“If market conditions are not competitive … the risk that prices will be volatile is real,” she said.
Jansen added that addressing these challenges will be key to unlocking more investment in the sector.
The U.S. Senate on Wednesday approved Kevin Warsh as the next Federal Reserve chair, placing him at the helm of the central bank as it faces mounting political pressure and with inflation at a three-year high.
The Senate voted 54 to 45 to in favor of Warsh, with Republicans holding a slim majority and ensuring President Donald Trump’s nominee to replace Jerome Powell was confirmed.
Once known as a monetary “hawk” against inflation, Warsh has shifted in line with Trump’s push for lower interest rates that has posed an unprecedented challenge to the Fed’s independence.
The incoming Fed chair, confirmed for a four-year term, has promised to bring “regime change” at the bank, which he has criticized as too political and too open in communicating its decision-making.
But with inflation still above the Fed’s long-term two-percent target, and rising over Trump’s Iran war, Warsh is unlikely to convince fellow members of the bank’s rate-setting committee to cut immediately.
That could leave him open to attacks from Trump, who has relentlessly lashed out at Powell over rate decisions.
“Warsh’s biggest challenge will likely be dealing with President Trump,” said David Wessel, senior fellow at the Brookings Institution.
“The president does not respect the independence of the Fed and he wants interest rates to be lower.”
Fed independence attacks
In January, Powell said a Justice Department criminal probe against him over cost overruns related to a building renovation project was intended to create pressure on monetary policy decision-making.
That followed Trump’s separate attempt to oust Fed Governor Lisa Cook from the board.
The criminal probe against Powell has since been dropped, as the Trump administration aimed to smooth the path for Warsh’s nomination. The Supreme Court is due to rule on the legality of removing Cook.
Both moves were “unprecedented,” said Kathryn Judge, a Columbia law professor who focuses on banking.
While Warsh is Trump’s pick, as Powell was nine years ago, Judge said there was no reason to believe the pressure will ease.
“Fed officials have been put on notice that this president is willing to use all available tools to bully them into acceding to his demands,” she said.
Economic challenges
Warsh is taking over as the world’s largest economy continues to reel from repeated economic shocks.
The pandemic delivered a hammer blow to the Fed’s inflation target, with CPI peaking at 9.1 percent in mid-2022. It has since come down, but US households have been battered by years of higher-than-expected price increases.
In April, year-on-year inflation came in at a three-year high of 3.8 percent, fueled in part by surging oil prices in the wake of the US-Israel war on Iran.
The Fed’s other mandate is ensuring maximum employment. The unemployment rate has remained relatively firm at around 4.3 percent, but the steady number hides churn beneath the surface.
Job growth has been weak, see-sawing between expansion and contraction for months, with new jobs mainly driven by the health care sector.
The tumult has been partly hidden because there has been a significant drop in labor supply, driven by Trump’s deportation drive and an ageing population.
The situation has put Fed policymakers in the difficult position of having to choose between dueling mandates: raise interest rates to combat inflation, or cut them to spur growth?
A house divided
It is here that Warsh faces his third major challenge: divisions on the Fed’s rate-setting committee on the path forward.
At the last meeting, there was a rare outpouring of dissent, with three members declaring that the Fed should indicate a rate hike could be on the cards to combat inflation.
“One of Warsh’s challenges is that the Fed does seem divided — at times along partisan lines, which is a change from the past,” said Wessel.
Added to that another wrinkle: Powell will be the first outgoing chair in more than 70 years not to leave the board at the expiration of his term as its head.
Türkiye expects its current account deficit to widen this year due to high energy and non-energy commodity prices, Treasury and Finance Minister Mehmet Şimşek said on Wednesday.
But, Şimşek said, the deterioration is likely to remain temporary and manageable thanks to stronger macroeconomic fundamentals and policy gains.
His remarks came after Wednesday’s official data showed Türkiye registered a current account deficit of $9.6 billion in March, mainly due to a higher trade gap.
The figure was in line with market expectations but still marked the highest monthly gap in three years.
Türkiye’s external balance has been in focus due to the country’s heavy reliance on imported energy, whose prices spiraled due to the Iran war that has effectively shut the key Strait of Hormuz.
Excluding gold and energy, the current account deficit stood at $3.9 billion in March, the Central Bank of the Republic of Türkiye (CBRT) said. Goods recorded a gap of $9.5 billion, while services posted a surplus of $2.6 billion.
On annualized terms, the shortfall totaled $39.7 billion, or approximately 2.6% of gross domestic product (GDP).
The goods deficit recorded as $77.8 billion, while services recorded a net surplus of $63 billion. The primary and secondary income realized a net deficit of $23.8 billion and $1.1 billion, respectively.
Şimşek said elevated global commodity prices would put pressure on the external balance, but emphasized that the government’s economic program had improved resilience against such shocks.
“This year, the current account deficit will increase due to the high course of energy and non-energy commodity prices,” he wrote on the social media platform X.
“Thanks to the gains achieved through our program and strengthened macroeconomic foundations, we assess that this increase will remain at manageable levels and be temporary.”
The minister noted that the annualized current account gap was expected to decline significantly in April, supported by an improvement in the foreign trade balance.
However, he warned of a temporary deterioration in May, citing the impact of an extended public holiday period that is likely to disrupt economic activity.
“At the same time, we observe that the war’s impact on tourism revenues has remained limited,” Şimşek said
Tourism is a critical component of Türkiye’s external financing, helping offset part of the country’s structural energy import bill.
Şimşek also noted that direct foreign investment inflows totaled $1 billion in March, bringing annualized foreign direct investment to $12.6 billion.
He said Türkiye’s sovereign risk premium, measured by credit default swaps (CDS), had moved closer to pre-war levels, while debt rollover ratios remained strong.
“Our country’s risk premium is approaching pre-war levels, while the high trend in debt rollover ratios continues,” Şimşek said.
He added that the new investment incentive package currently under discussion in Parliament was expected to strengthen Türkiye’s financing structure and support long-term capital inflows.
“We continue policies that reduce external energy dependency while supporting value-added production and the green transformation,” he said.
Ankara and Brussels praised the momentum in their economic relations on Wednesday after a visit by a high-level delegation this week that saw series of meetings and agreements.
The delegation was accompanying Belgium’s Queen Mathilde as part of a high-level economic mission aimed at strengthening trade and investment ties between Türkiye and Belgium.
Queen Mathilde was received by President Recep Tayyip Erdoğan and met with top Turkish authorities, while also attending a series of meetings and events.
The delegation included 400 representatives of the Belgian federal and regional authorities, companies, federations, chambers of commerce and academic institutions.
Both sides noted that Türkiye-Belgium economic relations continue to benefit from the broader framework of Türkiye-EU relations, including the 1963 Ankara Agreement and the Türkiye-EU Customs Union.
“In this vein, they recognized the importance of the Türkiye-EU relationship and expressed support for constructive engagement, including discussions on the modernization of the Customs Union and continued facilitation of business and people-to-people mobility, in accordance with EU frameworks and benchmarks,” a joint statement said on Wednesday.
In addition to strengthening economic cooperation, they said the mission constituted an important step in building more structured and closer political relations.
Belgium last organized an economic mission to Türkiye in 2012, when the visit was led by King Philippe, then crown prince.
Talks and meetings during the five-day visit focused on strategic sectors such as energy, aerospace and defense industry, logistics and transportation, digital transformation and industry 4.0, and life sciences and pharma.
“As long-standing partners and NATO Allies, Turkish and Belgian sides noted with pleasure the momentum in their relations, facilitated by joint efforts and a shared interest in international peace and stability in view of regional and global developments,” the statement read.
Both sides said they acknowledged the deep-rooted relations and reaffirmed the contributions of the Belgian-Turkish community to political, economic, cultural and social ties.
The visit saw the signing of multiple bilateral agreements and memoranda of understanding, providing updated frameworks for cooperation and facilitating closer engagement in areas of mobility, defense, social protection and safety of agri-food products.
Officials said the two countries are aiming to increase the bilateral trade volume to $15 billion (TL 681.27 billion) in the near term.
Their trade reached $9.2 billion in 2025, including $5 billion in Turkish exports and $4.2 billion in imports.
They also expressed a major potential and a need for investments to increase.
Belgian investments in Türkiye totaled $9.3 billion between 2002 and January 2026, while Turkish investments in Belgium amounted to $490 million.
President Donald Trump arrived in Beijing on Wednesday for a two-day summit with Xi Jinping, receiving a lavish welcome alongside an entourage that included Nvidia CEO Jensen Huang and Elon Musk, as he prepared to press China to “open up” to U.S. business.
Trump is seeking to snag some economic wins on the first visit by a U.S. president to China in nearly a decade and maintain a fragile trade truce to prop up public approval ratings bruised by his war with Iran.
He was welcomed by Chinese dignitaries, a tightly choreographed formation of military honor guard and dozens of Chinese students waving U.S. and Chinese flags as he disembarked Air Force One in the waning hours of twilight on Wednesday.
Pausing midway down the red carpet as the students chanted “welcome, welcome, warm welcome” in Mandarin, he punched the air and smiled broadly before departing in his limousine.
The CEOs accompanying Trump are drawn mainly from companies seeking to resolve business issues with China, such as Nvidia, which has struggled to get regulatory permission to sell its powerful H200 artificial intelligence chips there.
Trump asked Huang at the last minute to join the trip, said a source familiar with the matter who spoke on condition of anonymity, and he was spotted boarding Air Force One during a refueling stop in Alaska en route to Beijing.
“I will be asking President Xi, a Leader of extraordinary distinction, to ‘open up’ China so that these brilliant people can work their magic,” he said in a post on Truth Social, referring to the CEO delegation.
“I will make that my very first request.”
Asked about Trump’s post, Guo Jiakun, a spokesperson for China’s Foreign Ministry, said Beijing stands ready to “expand cooperation, manage differences and inject more stability and certainty into the turbulent world.”
As Trump prepared for the pomp-filled occasion, his trade negotiator, Treasury Secretary Scott Bessent, wrapped up three hours of preparatory talks with Chinese officials in South Korea. China’s official Xinhua news agency described them as “candid, in-depth and constructive,” but officials did not offer any detailed summary.
Trump’s two days of meetings will include a grand reception at The Great Hall of the People, a tour of Beijing’s 600-year-old Temple of Heaven imperial religious complex, and a state banquet.
Apart from trade, the talks will cover a host of sensitive subjects from the Iran war to U.S. arms sales to Taiwan, the island that China regards as part of its territory.
Trump is widely expected to encourage China to convince Tehran to make a deal with Washington to end the conflict, though he has said he did not think he would need its help.
China reiterated on Wednesday its strong opposition to U.S. arms sales to Taiwan, with the status of a $14 billion package awaiting Trump’s approval still unclear.
The United States is bound by law to provide Taiwan with the means to defend itself, despite a lack of formal diplomatic ties.
Bessent preps in South Korea
While Trump rubbed shoulders with executives aboard Air Force One, Bessent held his latest round of trade negotiations with Chinese Vice Premier He Lifeng at a VIP reception room at South Korea’s Incheon airport.
The talks ran about three hours to end just before 4 p.m. (0700 GMT), a U.S. official said.
The two sides are eager to maintain a truce struck last October in which Trump suspended triple-digit tariffs on Chinese goods and Xi backed away from choking global supplies of rare earths, vital in making items from electric cars to weapons.
They are also expected to discuss forums to support mutual trade and investment and dialogue on AI issues, while Washington looks to sell Boeing airplanes, farm goods and energy to China to cut a trade deficit that has long irked Trump, U.S. officials have said.
Beijing, for its part, wants the U.S. to ease curbs on exports of chipmaking equipment and advanced semiconductors.
Trump enters the talks with a weakened hand.
Courts have hemmed in his ability to levy tariffs at will on exports from China and other countries.
The Iran war has also boosted inflation at home and escalated the risk that Trump’s Republican Party will lose control of one or both legislative branches in November’s midterm elections.
Though the Chinese economy has faltered, Xi does not face comparable economic or political pressure.
“The Trump administration needs this meeting more than China does, as it needs to show to American voters that deals are signed, money is made,” said Liu Qian, founder and CEO of Wusawa Advisory, a Beijing-based geopolitical advisory firm.
While Trump has lauded his personal rapport with Xi and respect for China, several Beijing residents told Reuters they viewed his visit with a mixture of hope and suspicion.
“I don’t know if he’s genuinely sincere,” Lou Huilian, a 44-year-old who works in the oil trade, said outside a metro station as she headed to work on Wednesday.
“But speaking as a Chinese person, and as someone working in trade, I just hope some good policies can come out of this.”
Oil cartel OPEC on Wednesday cut its forecast for global oil demand growth in 2026, joining other forecasters such as the International Energy Agency (IEA) in trimming expectations amid disruptions caused by the Iran war.
The producer group sees a smaller hit to demand than the IEA, which earlier on Wednesday increased its estimate of the decline in oil use this year. OPEC said consumption would rebound later and raised its demand growth forecast for 2027.
The war has effectively closed the Strait of Hormuz, a key global oil route, curbing millions of barrels of Middle East output and sending fuel prices soaring. The surge is hitting consumers and businesses, and prompting government steps to conserve supplies.
World oil demand will rise by 1.17 million barrels per day in 2026, OPEC said, down from 1.38 million bpd expected previously. For 2027, OPEC expects oil demand to rise by 1.54 million bpd, up 200,000 bpd from the previous forecast.
“The global economic growth continues to show resilience for this year despite geopolitical tensions, particularly in the Middle East,” OPEC said, leaving its economic growth forecasts unchanged.
Global oil demand is expected to average 104.57 million bpd in the second quarter, down from the 105.07 million bpd forecast last month, OPEC said. The previous report had already cut the second-quarter estimate by 500,000 bpd.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies such as Russia, had agreed to resume output increases from April, but the closure of Hormuz has made it impossible to deliver on the deal. The report said output fell further in April.
OPEC+ crude output averaged 33.19 million bpd in April, down 1.74 million bpd from March, the report said, citing secondary sources OPEC uses to monitor its production.
The April figure includes the United Arab Emirates (UAE), which left OPEC on May 1.
This year’s COP31 climate summit, to be hosted and chaired by Türkiye, offers an important opportunity to address the relationship between climate change and agri-food systems, a regional representative to the U.N.’s food agency said in an interview published Wednesday.
Speaking on the sidelines of the 5th Istanbul International Water Forum, which addressed regional and global water challenges and drew a number of prominent international and regional figures to Istanbul, Viorel Gutu, U.N. Food and Agriculture Organization (FAO) assistant director-general and regional representative for Europe and Central Asia, evaluated the issues of such as water use and efficiency.
Gutu told Anadolu Agency (AA) that water use in agriculture, food security, and the upcoming U.N. climate summit COP31 were among the key issues discussed at the Istanbul forum, adding that the event provides an important platform for advancing water resilience and efficiency, which are high on the global agenda.
He said he used the event to underline the importance of the link between water and agricultural and food production, noting that “70% of water use is related to food production, related to agriculture, and it is important to bring efficiency into the agenda of food producers.”
Gutu highlighted key statistics on the issue, saying water-use efficiency in agriculture stands at just $0.7 per cubic meters, compared with more than $50 in industry and over $114 in the services sector.
He said the figures point to a significant efficiency gap, adding that they also indicate major opportunities to improve water-use efficiency in the agriculture and food sectors.
An estimated 673 million people were living in hunger in 2024, while around 2.5 billion lack access to a healthy diet and face food insecurity worldwide, Gutu said.
He said the situation is becoming increasingly critical due to growing population pressures, noting that the global population is projected to reach 10 billion by 2050.
Gutu said rising population would also increase demand for food, adding, “We have to be ready to produce more using the same resources. In the last 60 years, agricultural production has tripled, but the area used for agriculture has increased only by 8%. So, it was mostly focused on productivity.”
Discussions around food security need to increase, Gutu also said.
“All of this is part of a broader system, and that is why events like this are so important – to discuss these issues, raise awareness, develop and share solutions, and advise governments on these solutions,” he added.
Moreover, Gutu said the U.N. target of limiting global warming to 1.5°C (2.7°F) is crucial to ensuring conditions capable of meeting future needs.
He added, “If we invest properly in preserving our natural resources, in efficient use, and bringing modern technologies to the ground, then it is possible. Still, when we speak about this 1.5-degree limitation, we have to be aware that we are already experiencing climate shocks, severe droughts, and different floods, events which were not characteristic to certain parts of the world. So, now, we have to invest in adaptation, also in resilience, and obviously allow and help people on the ground in the most vulnerable areas to cope with this climate stress and shocks.”
Gutu said the COP summits held under the U.N. Framework Convention on Climate Change (UNFCCC) are important for addressing all dimensions of climate change.
“From the FAO perspective, it is important to note that only a few COPs ago, there was finally an attempt to bring agri-food systems and agriculture onto the COP agenda. Let’s not forget that around 30% of greenhouse gas emissions come from agriculture. But agriculture is not only part of the problem, but it can also be part of the solution,” he said.
COP31, to be hosted and chaired by Türkiye this year, would provide an important opportunity to address the many dimensions of the relationship between climate change and agriculture, he noted.
“First, let me congratulate Türkiye on hosting this huge and very important global event. We also see COPs, including COP31, as an opportunity not only to raise attention but also to help mobilize climate financing for agri-food systems,” he also said.
Assessing the role of climate finance in agriculture, Gutu said agri-food systems currently face an annual financing gap.
“We are currently facing an annual financing gap of $1.3 trillion for agri-food systems. If this financing gap could be addressed through commitments made during and beyond the COP process, it would significantly advance progress toward our goals,” he said.
“I believe this represents another major opportunity, and we as the Food and Agriculture Organization will continue engaging with governments, participating in negotiations and drawing attention to agri-food systems,” he added.
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