Borsa Istanbul and Turkey’s 5-year credit default swaps (CDS) on April 7 fell victim to the global tumult brought about by the unveiling of Donald Trump's "Liberation Day" tariffs. Stock exchanges from the US to the Far East have nosedived by 10-30% since the US president's big announcement on April 2.

Leading stock exchanges have entered bear market territory. Borsa Istanbul’s benchmark BIST-100 index was down a further 3% d/d during the morning hours of April 7 while Turkey'sn CDS hit the 370s, recording the highest levels since November 2023.

The Turkish stock exchange fell around 1% on the tariffs announcement day. The decline was much smaller than negative outcomes seen on the FTSE and Nasdaq.

The Turkish stock exchange's losses are still not as stark as the sharp falls seen on other stock markets around the world, as it is controlled by the government to avoid collapses.

The USD/TRY pair, meanwhile, remained in the 38s.

Turkey, diehard winner

On April 5, Turkish Vice President Cevdet Yilmaz said that Trump's baseline tariff was playing to Turkey's advantage.

The relatively low 10% baseline tariff that the US has imposed on countries including Turkey could favour Turkish exporters, according to Yilmaz.

Turkey also stood to benefit from sharp declines seen in oil prices, the VP also said.

The Brent oil price sank from the $75s per barrel to the $63s in the wake of the Trump tariffs move. Turkey imports just about all of its oil and gas needs.

Turkey can also capitalise on an advantage caused by the sharp increase in the EUR/USD pair. The country imports intermediary goods in USD and sells final products to Europe in EUR.

The EUR/USD rate jumped to the 1.11s from the 1.08s. It was trading in the 1.09s on April 7.

Could it turn out to be Trump 'trolling'?

Despite the huge media frenzy and market turmoil that Trump has created, the implementation of the sweeping tariffs is not as yet certain. Trump previously announced some tariffs on Mexico and Canada that were later lifted and came to be seen as his opening move in trade negotiations.

Whatever the case, Trump, still a TV showman to the core, has once again done a great job for editors and news programmers thirsty for clicks and ratings.