Risk, Leverage, Autonomy: Turkey’s Options in a U.S.–China World

Key Judgments 

• Scholarly consensus has historically framed Turkey as an emerging middle power with mid-size capabilities that contributed to the stability of the liberal international order as part of the Western alliance for much of the postwar period. With the international order now in flux, Turkey’s role is increasingly being questioned by scholars. The country claims to belong neither to the West, despite its NATO membership and candidate status for European Union (EU) membership, nor to the Global South, despite applying for BRICS membership. Instead, it straddles both through a self-proclaimed policy of strategic autonomy. 

   

• Turkey defines its current international posture as one of strategic autonomy, in which it attempts to carve out a more autonomous space from its traditional Western allies without completely severing its relations with them. At the same time, it is building new ties in the non-Western world, ranging from the Russia-China axis to Middle Eastern states.¹ This approach is premised on the assumption that Western hegemony has ended, and the world has already entered a post-Western era with multiple competing power centers. The withdrawal or the weakening presence of Western powers (as well as Russia) in various conflict theaters, from the Middle East and North Africa to the Caucasus, enables Turkey to play a more assertive role in these regions. 

   

• Turkey can be characterized as a developing country poor in natural resources, with a strong manufacturing base, a growing demand for raw materials, and the fastest-growing energy demand in the Organisation for Economic Co-operation and Development (OECD), which more than doubled between 2001 and 2021.² Yet Turkey also suffers from a weak currency, a high current account deficit, and high inflation, which peaked at 75.5% in May 2023. The new economic normalization management program launched after the May 2023 presidential and parliamentary elections aims to address these macroeconomic problems, with some limited progress.³

   

• Turkish policymakers are more interested in deepening the country’s relations with China (which they believe have not yet reached their potential) than in being a part of the U.S.-led policy of de-risking or decoupling from China.⁴ Still, China remains far from constituting a significant pivot in Turkish foreign policy, given insufficient institutional capacity building and private sector buy-in.⁵ 

Turkey’s Role and Importance as a Middle Power 

Turkey’s rise as a middle power has been enabled by a multitude of factors in the first decade of the 2000s. Its 1999 candidacy for EU membership ushered in a series of political reforms that put the country on the path toward democratic consolidation in the early to mid-2000s. Meanwhile, its 2001 financial crisis paved the way for the adoption of Western-oriented post-Washington Consensus policies endorsed by the International Monetary Fund (IMF) and the World Bank. As a result, Turkey has seen impressive growth rates in the past two decades, with real GDP growth averaging 7% from 2002 to 2007, and 5.4% from 2002 to 2022.⁶ Its improved democratic and economic credentials in the first decade of the 2000s also translated into growing influence in its wider region. Turkey took an active role in mediating conflicts, adopted a “zero problems” policy with its neighbors, engaged in democracy assistance in the Middle East and beyond, and was globally perceived as a potential political and economic model for Muslim-majority countries to emulate. Despite significant policy disputes with the U.S. administration in the wake of the 2003 invasion of Iraq, Turkey’s Western orientation — its constitutive foreign policy pillar since the establishment of the modern Turkish Republic — remained a fundamental reference point in Turkish foreign policy.

Turkey has been governed by the same political elite for more than two decades. The Justice and Development Party (AKP) has been in power since 2002, including a power-sharing arrangement with a minority partner, the Nationalist Action Party (MHP), since 2016. The AKP leader, Recep Tayyip Erdoğan, became prime minister in 2003, president in 2014, and executive president in 2018. He claimed nearly limitless executive powers during the state of emergency following a failed coup attempt in 2016, and the constitution was amended the following year to make those powers permanent. Today, Turkey constitutes an ideal case of competitive authoritarianism: the opposition continues to participate in national and local elections, but the playing field is highly skewed in favor of the incumbent in terms of spending, press coverage, voter suppression, and legal decisions.⁷ Although most Western observers think dimly of Turkey’s democratic prospects, the odds of Erdoğan and the AKP being ousted democratically and replaced by an opposition government are not negligible. The presidential election of 2023 was very close, and the main opposition party won the 2024 municipal elections in a near-landslide. 

Turkey’s Western orientation began to change in the 2010s. The 2008 global financial crisis and its aftermath made the transition to a post-Western world a dominant theme in global politics, diminishing the influence of Western-led international institutions such as the IMF, World Bank, and EU in shaping policy paradigms in Turkish political economy and foreign policy.⁸ Turkish policymakers have suggested that it is through strategic autonomy that Turkey can act as a balancer; a broker; a mediator in geopolitical conflicts, as in the case of Russia’s aggression in Ukraine; and an offensive realist actor, prioritizing hard power and military excursions backed by a strong defense industry to secure its national security, as in Syria, Iraq, and Libya. In doing so, Turkey claims it can initiate flexible partnerships with countries like Russia and China while maintaining its place in Western institutions. Hence, the expression of autonomy is premised on the assumption that Western hegemony is over, requiring selective partnerships to strengthen Turkey’s self-reliance and national security. As such, an autonomous foreign policy is primarily interpreted as autonomy from the Western bloc. 

Indeed, in most pressing domestic, regional, and global issues in the past decade, Turkey has not seen eye to eye with the United States — or with the EU. Turkey’s relations with the EU are heavily strained, with a de facto frozen accession process and various bilateral disputes, ranging from Cyprus to democracy and human rights. Despite being a de facto candidate for EU membership, Turkey remains excluded from any current formal or informal discussions on EU enlargement and foreign and security policy, both sparked by the Russian invasion of Ukraine. Turkey’s poor record in democracy, human rights, and the rule of law, along with the Cyprus impasse, has also led to the EU’s veto of initiating bilateral talks on upgrading the EU-Turkey Customs Union deal, which is sorely needed to ramp up trade performance, improve integration with the European supply chains, and drive economic productivity and global competitiveness. As a result, Turkey’s relations with the EU are now largely reduced to the 2016 EU-Turkey migration deal and existing economic ties between the two sides. At the time of writing, it is still unclear whether the EU will include Turkey in its recently launched SAFE (The Security Action for Europe) initiative – a new defense fund for joint procurement of defense capabilities. 

Turkey’s considerable distancing from traditional Western allies and its search for flexible partnerships with the non-Western world have coincided with a willingness to pursue an ambitious foreign policy agenda that resorts to military offensives when deemed necessary. It seeks to expand its existing presence and influence primarily in Africa (e.g., Somalia and Libya), the Middle East (e.g., Syria and Iraq), the Balkans, Caucasus, and Central Asia, sometimes through military interventions (as in Syria, Iraq, and Libya). There is considerable support among the Turkish public for the government’s foreign policy ambitions beyond Turkey’s borders. In a 2022 survey, 40.6% of the respondents considered the presidential cabinet’s foreign policy successful.⁹ 

Official development assistance (ODA) is one way through which Turkey seeks to expand its influence in its broader region. Since the mid-2000s, Turkey has heavily deployed ODA, to the extent that it consistently ranks in the top 10 providers of bilateral aid globally. From 2017 to 2023, Turkey’s annual ODA ranged between $7 and $8 billion in US dollars,¹⁰ with aid geographically focused on the Middle East, North Africa, sub-Saharan Africa, Central Asia, and the Western Balkans. Turkish ODA is mainly delivered in social infrastructure and services, production, commodities, humanitarian aid, and cross-cutting themes such as environmental protection. The bulk of Turkish ODA focuses on technical cooperation, capacity building, and infrastructure projects. Similar to other Southern donors, Turkey refrains from attaching political conditionality to ODA and chooses to engage directly and bilaterally with central administrations. While often positioning its aid policy in contrast to those of traditional powers with a strong anti-colonial rhetoric, it remains an observer state in the OECD Development Assistance Committee system, straddling its position between the North and the South. The content and direction of Turkish aid is motivated by expanding trade and investment, strengthening its military presence in its wider region, and spreading its soft power.¹¹     

Turkey has also been an influential military actor in conflict theaters, such as Nagorno-Karabakh, Libya, and Syria, as well as in post-conflict zones, like Iraq. However, not all of Turkey’s foreign policy overtures have delivered the desired outcomes. This has been most visible in the case of the Eastern Mediterranean. During the Arab Spring, Turkey perceived the public protests as a rare opportunity to position itself as a “rule-maker” in the wider region. When peaceful protests turned into a bloody civil war in Syria, and a military coup interrupted Egypt’s short-lived experience with democracy in 2013, the Turkish government’s ambitions in the region waned. For a long time, however, the government did not recalibrate its foreign policy stance, engaging in simultaneous discord with multiple actors, including (until the fall of Assad) Syria, Egypt, and Israel. As a result, Turkey was excluded from the Eastern Mediterranean Gas Forum, launched in 2019, which brought together all the states in the region except Turkey and Lebanon and later expanded into military and security cooperation among Forum members at Turkey’s expense.¹² This isolation compelled Turkish policymakers to recalibrate their approach in the early 2020s by trying to improve relations with Israel and Egypt as well as Assad’s Syria. While there is now an ongoing rapprochement with Egypt and considerable success in Syria with the fall of Assad, relations with Israel remain at a low point following the Israel-Hamas War. 

Policy Objectives

Foreign and Security Policy

Turkey’s foreign policy today, including its pursuit of autonomy from the West, is largely conditioned by the country’s domestic politics and the governing AKP’s effort to remain in power under its leader, President Erdoğan. The main constitutive pillars of the current competitive authoritarian regime — state capitalism, domestic legitimacy, and nationalism — relate to Turkish foreign policy in multiple ways.¹³

Turkey’s state capitalism relies heavily on sustaining a personalized network of capital accumulation and military aggrandizement,¹⁴ which necessitates and enables an expansionist foreign policy. This expanding international presence, in turn, feeds into the domestic nationalist narrative that legitimizes the party’s claims to elevating Turkey’s global status as an assertive, independent, and leading power. These themes featured prominently in the government’s campaign leading up to the May 2023 presidential and parliamentary elections, where it claimed a clear victory.¹⁵ 

Ankara’s top security and defense issue concerns Syria. As one observer noted, “No other crisis has redefined Turkey’s place in regional and international politics as much as the Syrian conflict.”¹⁶ Since the onset of the civil war, Turkey has invested heavily in Islamist opposition groups and hosted 3.6 million Syrian refugees. It now views the fall of the Assad regime as an opportunity to expand and consolidate its economic and geopolitical presence in Syria. Its main goals are threefold: assisting with the country’s reconstruction efforts, which could create new investment opportunities for crony pro-government firms; repatriating some Syrian refugees to bolster domestic public support; and clearing northern Syria of Kurdish-led Syrian Democratic Forces (SDF), which it perceives as a key national security threat. 

While the first goal is highly likely, the second looks more difficult and the third will heavily depend on how relations between the Syrian Kurdish forces and the Syrian government evolve. Turkey and Arab states have already pledged $14 billion in Syrian infrastructure development projects, with Turkey bringing operational capacity and Europe and the Arab states covering the bulk of the financing. On the migration front, as of early September 2025, nearly half a million Syrians had reportedly returned to Syria.¹⁷ Security, however, appears to pose the biggest challenge. With backing from Washington, Turkey is trying to convince the Syrian Kurdish forces to integrate into the security structures of the central Syrian state, which they are hesitant to do, particularly after the violence that broke out in Suwayda in summer 2025.¹⁸ This also endangers Ankara’s recent “opening” to its own Kurdish minority at home, widely viewed as a move to garner Kurdish support for Erdoğan’s reelection bid. Turkey’s security concerns are compounded by Israel’s growing presence in post-Assad Syria and its broader bid for regional hegemony. 

Another chief area of concern for Turkey’s security is the Eastern Mediterranean. The dispute among Turkey, Greece, and Cyprus over maritime boundaries long predates the AKP, but the discovery of natural gas reserves in the region in 2009 reignited tensions. The situation escalated into a full-scale multinational conflict after 2015, enabled partly by the shifting regional balances after the Libyan civil war.¹⁹ Although the region has been relatively calm in the last few years, there is potential for escalation, as Turkey feels a strong sense of encirclement after being excluded from the burgeoning bilateral and regional cooperation initiatives involving the United States, Greece, Cyprus, and Israel, as well as the Eastern Mediterranean Gas Forum.²⁰ This fear also informed the December 2024 statement by the Turkish minister of transport announcing talks with the new Syrian administration to demarcate maritime zones in the Mediterranean.²¹    

Finally, in the field of security and defense, Turkey is particularly concerned with building and strengthening an autonomous defense industry. Amid intensifying geopolitical rifts with the United States, a deteriorating regional security environment, and more frequent defense-related sanctions by the Western powers, Ankara has prioritized building indigenous technologies in the defense industry to reduce foreign dependence as part of its search for autonomy. Thedefense industry also serves a domestic political function: research has shown that the narrative of a strong defense industry boosts support for the regime by increasing domestic popular support behind the government.²² 

Turkey has already made important strides in building up its defense industry. As of 2023, three of the world’s top 100 arms companies are based in Turkey, with revenues of $6 billion — up 24% from the previous year, partly due to the Russia-Ukraine War.²³ Turkish arms sales have also surged, moving the country’s global ranking in defense exports from 42nd in 1996 to 14th in 2020 and 11th in 2021.²⁴The defense and aerospace industry has more than doubled its exports to $5.5 billion in 2023.²⁵ In addition to established public contractors such as ASELSAN and TAI, Baykar Holding, owned by Erdoğan’s son-in-law, has succeeded in producing effective Bayraktar TB-2 drones,²⁶ which it now exports to 32 countries,²⁷ including Azerbaijan, Ukraine, Qatar, and Libya. Turkey has also built the first national warship (MILGEM) and developed various air defense systems, military vehicles, and equipment. 

Figure 1. Turkey’s Defense Industry Exports (in $ Billions)

Despite recent progress, the defense industrial sector is still fledgling, with significant questions about economies of scale, spillover effects into other sectors, and the commercial viability of government support schemes. The Turkish defense industry remains highly monopolized by select pro-government firms,²⁹ and it suffers from considerable brain drain, with many highly skilled engineers and professionals in the field migrating to the West since the late 2010s.³⁰ Furthermore, “despite a focus on high-tech products, over half of the gross value generated in the Turkish defense industry comes from low- and medium-technology products.”³¹

Although Turkey is pushing for an indigenous and self-sufficient defense sector, it continues to engage in international collaboration, whether under the auspices of NATO or through mechanisms such as the Organisation for Joint Armament Cooperation,³² largely due to financial difficulties. Its private defense companies attract investments from multiple sources, including EU member states, the United States, and South Korea, as well as Qatar, the UAE, and Saudi Arabia. Strained relations with Washington, particularly after Turkey was excluded from the F-35 program following its purchase of the S-400 missile defense system from Russia, had already shown Turkish policymakers the difficulty of leveraging relations with Russia and Turkey’s NATO partners in security and defense matters. After the Russian invasion of Ukraine, defense-industrial cooperation with Russia ceased to be an option.³³ Turkey briefly considered purchasing Chinese defense technology in 2013, when the Chinese FD-2000 system was the winner of the tender for its Long-Range Missile Defense System. However, due to pushback from NATO allies (most notably the United States) and the threat of sanctions, Turkey ultimately cancelled the program after two years of negotiations.³⁴ In this context, Turkey’s main options for international cooperation in defense-industrial relations remain its Western partners, namely Europe and the United States. Yet impediments persist. It remains to be seen whether Turkey will be included in the EU’s newly launched SAFE (Security Action for Europe) program, which aims to boost European investment in security and defense, given the French, Greek, and Cypriot vetoes. Similarly, there is still considerable uncertainty concerning whether — and, if so, when — the bottleneck with Washington over Countering America's Adversaries Through Sanctions Act (CAATSA) sanctions will be resolved. 

Economy and Trade 

Turkey’s “deficit-led” economic growth model generates external dependencies due to high reliance on low- and medium-end exports.³⁵ Dependence on the import of intermediary goods and advanced technologies causes balance of payments problems and exacerbates the financial fragility of the country. For example, high-technology goods account for around 3% to 4% of Turkey’s manufactured exports, highlighting the need for significant industrial upgrading toward a high-technology frontier. Hence, Turkey needs a more coherent economic security framework to support its autonomy-seeking policies. 

Developing closer trade and investment ties with the non-Western world without abandoning longstanding political-economic relations with the West has been stated as a key principle of the government’s foreign policy strategy. Government representatives state that they do not consider Turkey’s foreign (economic) policy orientation a “zero-sum game.” In an interview, a top government official explained, “The fact that we are a NATO member and want to be part of the EU does not mean we cannot develop better economic and political relations with Russia, China, and Gulf countries. The fact that we are trading with China and Russia does not mean we will give up trading with Europe ... We do not want to be dependent on any country.”³⁶

At face value, this statement aligns with the standard autonomy-seeking policies of middle powers trying to take advantage of a multipolar order. In fact, Turkish foreign trade has diversified considerably over the last two decades. Turkey’s total trade volume with the EU grew from approximately $75 billion in 2004 to $203 billion in 2024. During the same period, Turkey’s trade with Asia (comprising Near and Middle East, Russia,China, and other Asia) increased from a mere $41 billion to $202 billion. For traditional Western partners, particularly the EU, the share of Turkey’s overall foreign exports decreased from 49% to 42%, while the EU’s share of imports declined from 45% to 32%. Turkey’s trade with Middle Eastern countries also expanded considerably during this period, with the region’s share of Turkey’s exports increasing from 12.5% in 2004 to 23% in 2024. The growth with Russia and China was especially striking, with trade increasing from $6.7 billion in 2002 to $101 billion in 2024, representing 17% of total external trade.³⁷  In line with this approach to foreign trade, Turkey’s Ministry of Trade adopted the “far countries strategy” in 2022, aiming to quadruple trade relations with economies whose average distance to Turkey is 8,500 km. This strategy also covers large economies in the Global South, such as China, Brazil, and India.   

Figure 2. Turkey’s foreign trade, regional breakdown (in $ Billions)

As a developing country with limited natural resources, a solid manufacturing base, and growing raw materials demand, it is normal for Turkey to have trade deficits with Russia and China. At the same time, Turkey’s diversification away from the West toward non-Western markets leads to certain challenges in carving out a more autonomous space in its foreign relations, as increased trade with large non-Western countries — especially Russia and China — is likely to create new dependencies. Turkey’s foreign trade with the EU is much more balanced than with Russia or China. The export/import ratio for Turkey with China is less than 10%; with Russia, it is just 13%. The most important non-Western trade partners, Russia and China, are not large export markets for Turkish entrepreneurs. 

However, Turkey’s economic relations with these countries go deeper than trade. In 2023, a record 6.3 million Russian tourists visited Turkey. Turkish construction firms have built several projects in Russia, amounting to $102 billion between 1987 and 2023 — 20.3% of the total volume of Turkey’s construction projects abroad.³⁸ Still, as documented above, the interdependence in Russia-Turkey and China-Turkey relations is asymmetrical. As long as the composition of Turkish foreign trade remains the same, the trade deficit with those countries will likely grow, putting additional pressure on Turkey’s current account deficits. Moreover, Turkey lacks strategic sectors such as energy or high-technology that could provide competitive leverage. 

On the other hand, Turkey heavily relies on Western capital in the financial and investment domains. Western investors — the EU and the United States — still make up almost 70% of Turkey’s incoming foreign direct investment. Worsening political and security ties with Western countries, institutional deterioration, and inconsistent economic policies impede Turkey’s potential to attract high-quality foreign investment from Western countries, which is necessary for a sustainable balance of payments accounts and economic development. During the 2010s, “the amount and quality of foreign direct investment in the Turkish economy have declined significantly … not a good sign in terms of the long-term contribution of foreign investments in Turkey’s overall economic productivity and technology transfer.”³⁹ 

On the institutional front, the poor state of political relations with the EU poses delays in upgrading the Customs Union and Turkey’s adoption of green transformation measures, both crucial for Turkish entrepreneurs to gain deeper access to European markets. The Customs Union, covering only manufactured and processed agricultural products, is now an outdated deal and needs to be modernized to cover other sectors. It is also a suboptimal arrangement because when the EU signs a free trade agreement with a third country, that country gains automatic access to the Turkish market, whereas Turkey must sign a separate agreement with the same country for reciprocal market access.⁴⁰ This lopsidedness was, arguably, less of a concern when free trade and multilateralism were predominant norms, but in times of geoeconomic fragmentation and the “weaponization” of interdependence, the asymmetric nature of the Customs Union is more likely to constrain Turkey’s foreign economic policy options. 

This imbalance leaves Turkey in a delicate situation. Developing closer trade ties with the Russia-China axis comes with growing trade deficits, while investments from China remain limited. In 2024, China did not even rank in the top 20 countries providing foreign direct investment flows to Turkey, while the Netherlands, Germany, and the United States were among the top three investors in the country.⁴¹ Scholars have found that the low rate of Chinese investment, despite Turkey’s size and geopolitical significance, stems from a dominant perception in China of Turkey as a “high-risk country” for large-scale investments. The risk perception is tied mainly to the fragmentation of Turkey’s policymaking structure, which leads to abrupt policy changes and relies on relations with crony capital, with which Chinese investors have yet to establish sufficient connections.⁴² In the face of this heightened political risk, China’s economic strategy has been to deepen economic cooperation with Turkish small and medium-sized enterprises, which have been more welcoming of Chinese goods and capital.⁴³   

When it comes to positioning itself in the global race for critical materials, Ankara stands closer to the West but still wants to keep its options open. Turkey’s interest in this area spiked after it announced the discovery in Central Anatolia of the second-largest rare element reserves in the world.⁴⁴ Although it has been negotiating with China for the past two years to mine these rare earth elements, reports indicate that no agreement has been reached due to Turkey’s insistence on producing the final product domestically rather than exporting the extracted material to China for its own use.⁴⁵ Against this backdrop, Turkey has declared its openness to working with Western countries for extraction and, in September 2024, joined the U.S.- and EU-led Minerals Security Partnership Forum to collaborate on the production of critical raw materials and rare earth elements.⁴⁶ In a similar vein, following Erdoğan’s visit to Washington in October 2025, reports emerged that Turkey will be partnering with the United States to refine the compounds in Central Anatolia.⁴⁷

Energy and Climate

Energy dependence and security are chief policy area concerns for Turkey. The country’s energy needs have been rising for the past two decades and are expected to increase until at least 2035.⁴⁸ In 2023, Turkey ranked 15th in primary energy consumption worldwide,⁴⁹ with hydrocarbons (natural gas, oil, and coal) constituting 81% of its energy mix.⁵⁰ Despite efforts to reduce dependency through generating local sources, Turkey is far from being self-sufficient in meeting its energy needs and heavily depends on Russia for supplies. Russia is its largest supplier of natural gas, oil, and coal, with almost 40% of Turkey’s total natural gas imports coming from Russia (see Figure 4). Oil imports from Russia also surged from 24% to 41% of total oil imports in 2022, following the outbreak of the Russia-Ukraine War (see Figure 5). This surge is largely attributable to Turkey’s role in refining and reselling Russian oil, which has been called “the new route for Russian oil to the EU.”⁵¹ 

Figure 4. Turkey’s Natural Gas Imports per Source Country (Percentage of Total)

Figure 5. Turkey’s Oil Imports per Source Country (Percentage of Total)

Turkey’s energy dependence on Russia poses both economic and security risks for the country, placing a heavy burden on its large current account deficit. Nevertheless, Turkey has deepened energy cooperation with Russia by allowing Russia’s Rosatom State Atomic Energy Corporation to build, own, and operate the Akkuyu nuclear power plant in Mersin, on the country’s Mediterranean coast. The first fuel was delivered in April 2023, during Erdoğan’s election campaign, and the plant was expected to be fully operational by 2026.⁵² However, considerable delays are now expected, given that German export regulations — possibly linked to sanctions — have prevented the delivery of key equipment, which the Russians later had to purchase from China.⁵³

As of 2025, Turkey is in further talks with the United States and South Korea to build a second nuclear power plant in Sinop, in Turkey’s Black Sea region. Turkey is also negotiating with China to construct a third nuclear power plant in the Thrace region, in the country’s northeast. In May 2024, the Turkish minister of energy declared that both sides were very close to a deal, with no concrete deal reached as of writing.⁵⁴ The United States also entered discussions more recently, on the construction of both large-scale nuclear power plants and small modular reactors.⁵⁵ While there are no concrete projects so far, the two countries signed a memorandum of understanding to deepen their partnership in nuclear energy in September 2025.⁵⁶ Plans are also underway for a new 10-year liquified natural gas (LNG) agreement with ExxonMobil to increase the weight of the United States in Turkey’s natural gas supplies.⁵⁷ 

Turkey is also diversifying its energy mix through renewable energy resources, particularly wind and solar. It ranks 11th globally and fifth in Europe in renewable energy-based power capacity.⁵⁸ The government has also included hydrogen in its national energy strategy to help its decarbonization efforts. As of 2025, renewable energy sources constitute almost 20% of Turkey’s total energy mix.⁵⁹ Despite the official commitment to increase renewables, there are significant hurdles, such as deficiencies in infrastructure, limited financial resources, regulatory barriers, and the slow pace of renewable energy auctions that hinder private investment. Furthermore, Turkey’s heavy reliance on natural gas for baseline power also slows the transition, preventing Turkey from realizing its potential as a regional leader in clean energy development. 

On climate change, Turkey’s official position is not one of denial. In fact, the country has adopted a policy structure to address climate change, including a national long-term Climate Change Strategy and a National Climate Change Mitigation and Adaptation Plan (2024-2030). Turkey ratified the Paris Agreement in 2021 and announced its net-zero emissions target for 2053. Europe’s green transition, in particular the EU’s Emissions Trading System and its Carbon Border Adjustment Mechanism, have been key drivers of Turkey’s climate agenda, given their potentially adverse impact on Turkey’s carbon-intensive industries, such as steel and cement, which are exported in large volumes to the EU. To mitigate these impacts, a Climate Law establishing a Turkish Emission Trading System was drafted in 2025, but it was withdrawn before the parliamentary vote in May due to opposition from climate change doubters on the fringes of the Islamist political spectrum. The draft law is expected to be reintroduced for parliamentary approval in the future. Still, Turkey’s climate efforts continue to face multiple problems at the implementation level, including its embedded infrastructure, limited financial resources, and a deep industry reliance on fossil fuels. 

In addition to domestic sources, Turkey has traditionally resorted to Western funding, mostly from Europe, to finance its energy transition and climate adaptation. In fact, Turkey is the seventh top destination for European foreign investment in renewables. More recently, China has become more actively involved in financing and investing in renewable energy projects in Turkey. For instance, the Asian Infrastructure Investment Bank committed $5 billion to support Turkey’s climate resilience and sustainable development projects from 2025 to 2027. Still, Chinese investment in this field remains low, at only 1.21% of all installed wind capacity, largely because Chinese-backed consortiums to build large-scale wind and solar plants in Turkey have been sidelined in past bidding processes in favor of crony investors. This has led Chinese investors to cooperate instead with small and medium-size Turkish firms.⁶⁰

In contrast to their declared climate agenda, Turkish policymakers also wish to leverage the country’s geographic position to make it a regional natural gas hub. Turkey is already connected to Azerbaijan and Iraq via two oil pipelines and to Azerbaijan, Iran, and Russia via four natural gas pipelines. TANAP (Trans-Anatolian Natural Gas Pipeline) and TurkStream already transmit supplies from the Caspian and Russia to the European markets, though the amounts only meet a fraction of Europe’s energy needs. Turkey expects that by diversifying its energy mix, it can send a considerable portion of imported natural gas to Europe.⁶¹ This, however, is easier said than done, given the financial, logistical, and political difficulties of securing sizable alternative energy supplies to replace those from Russia, which European states are keen to avoid. For instance, Iraq has large, untapped energy reserves that could potentially be transported to Europe via Turkey. The challenge is not only that the gas is highly toxic and therefore more expensive to extract but also that its export requires delicate political agreements, not least between the Iraqi Central government and the Kurdistan Regional Government (KRG), as well as between the Kurdistan Democratic Party (KPD) and the Patriotic Union of Kurdistan (PUK).⁶² Another complicating factor is the EU’s green transition, which will likely reduce future need for fossil fuels, making it necessary for Turkey to accelerate its own energy transition, possibly with European investments. Still, as of today, it can be argued that the fall of Assad and a weakened Russia and Iran in the broader region foster a more favorable international context for Turkey to serve as an energy hub, as demonstrated in the February 2025 agreement between Turkey and Turkmenistan to transport Turkmen gas to Europe via Iran’s existing natural gas network.⁶³

Technology

Turkey can be considered a moderately technologically capable middle power, ranked as an “advanced” country in mobile connectivity,⁶⁴ with a burgeoning IT and digital services industry. The country has even been called a “star of European tech,”⁶⁵ due to the global success of its startups and its young, technology-savvy population, making it an attractive market for investors. Nonetheless, progress in the technology field has been uneven, owing to the deterioration of industrial policy management, institutional weakness, and macroeconomic instability, particularly following the introduction of the authoritarian presidential system, which eroded and continues to undermine state capacity in Turkey.⁶⁶ 

Much of Turkey’s technological growth in recent years has been driven by its home-grown defense industry. Here too, however, the bulk of investment comes from Europe and the United States, with China and Russia playing relatively marginal roles. As a NATO member state, Turkey produces military equipment that largely complies with NATO standards and participates in defense technology trade, exchange, and collaboration with the United States and other NATO members. This limits opportunities for closer engagement with China and Russia on defense technology matters. Had Turkey’s relations with the West been more positive in recent years, it might have leveraged “friend-shoring” or “near-shoring” policies to attract investments in high-technology manufacturing.⁶⁷ 

U.S. and China Ties

Turkey’s strategy in the U.S.–China contest is selective alignment—maintaining a hedge between both sides while navigating significant economic, institutional, and geopolitical limits. 

U.S. Ties 

Turkish relations with the United States have been strained until recently, primarily due to U.S. financial and logistical support for the People’s Protection Units (YPG) in northern Syria, which Turkey considers a terrorist organization and an existential threat to its national security. The Turkish government’s mistrust toward Washington peaked after the failed coup attempt in July 2016. Turkey’s purchase of the S-400 Russian surface-to-air missile system in 2017 led to its removal from the United States’ F-35 fighter jet program and sanctions under the Countering America's Adversaries Through Sanctions Act (CAATSA) in 2020, including a ban on all U.S. export licenses and authorizations for the Turkish Secretariat for Defense Industries (SSB) and asset freezes and visa restrictions on its president and other SSB officers.⁶⁸ Although Turkey’s approval of Sweden’s accession to NATO in January 2024 secured U.S. approval for the sale of F-16 warplanes to Turkey, this concession was overshadowed by the U.S. decision to extend F-35 warplane sales to Greece on the same day, as Turkey had hoped to buy up to 100 F-35s to modernize its air force.⁶⁹ 

Furthermore, anti-American sentiment remains high among the Turkish public and is actively encouraged by the government. In public opinion surveys conducted between 2018 and 2022, respondents consistently ranked the United States as the biggest threat to Turkey’s national security.⁷⁰ From the perspective of the United States, the last decade of tensions has strengthened the perception that Turkey can no longer be considered a credible ally, though at the time of writing, there is considerable uncertainty surrounding the future of U.S.-Turkey relations under the Trump administration, with the potential for improvement. Erdoğan’s visit to Washington in October 2025 signaled potential cooperation in defense, aerospace, and energy (nuclear and LNG). There is also some alignment on broader foreign policy issues in Gaza and Syria, with Turkey acting as a mediator/guarantor for President Trump’s October 2025 Gaza ceasefire framework and the United States supporting the integration of SDF into post-Assad Syrian central/state institutions.   

Given that the Turkish economy is still tightly coupled with Western — especially American — financial networks, the West continues to be Turkey’s main source of capital. However, as the Turkish government has frequently disagreed with its transatlantic allies on key geopolitical issues, Turkey has become more exposed to “weaponized interdependence.” For example, amid geopolitical turmoil with the United States in 2019, President Trump threatened to “destroy and obliterate” the Turkish economy.⁷¹ That conflict came just one year after a 40% drop in the value of the Turkish lira, in the middle of another political stalemate between the parties in 2018.⁷² Furthermore, President Trump raised tariffs on steel imports from Turkey up to 50% in the wake of Turkey’s Syria operation in 2019.⁷³ The Volkswagen Group also suspended its $1.4 billion investment in Turkey’s Manisa region and later cancelled the project entirely in 2021, which the Turkish officials lamented as a “political” decision.⁷⁴

China Ties

Turkey’s pursuit of autonomy from its Western allies has recently raised questions about its relations with China. After Erdoğan’s visit to China in April 2012, Turkey’s first high-level visit to China was by Minister of Foreign Affairs Hakan Fidan in June 2024. Although Turkey-China relations have progressed since the 2010 “strategic partnership” agreement, China has not yet emerged as a substitute for Turkey’s souring relations with the West.⁷⁵ Factors include Turkey’s NATO membership, the negligible impact of the Chinese Belt and Road Initiative (BRI) on the Turkish economy, low Chinese foreign direct investment compared to flows from Europe and the United States, and Turkey’s trade deficit with China. 

The Turkish government does not view China as a threat and seeks to deepen economic engagement, as Fidan expressed on his recent visit. Turkey joined the BRI in 2015 to attract Chinese investment, but it ranks only 23rd out of 80 countries that receive Chinese investment, totaling $9 billion by the end of 2023.⁷⁶ Research suggests that Chinese investors have been reluctant to invest in Turkey due to the country’s weakened rule of law and unpredictable policies.⁷⁷ Turkey also seeks to move closer to the Chinese technology ecosystem.⁷⁸ China’s Huawei has held a dominant position in Turkey’s telecommunications sector for over a decade and is now expanding into the country’s renewables industry.⁷⁹

 Turkey’s trade deficit with China is also striking. Turkey imports $45 billion in Chinese goods but exports only $3.3 billion.⁸⁰ Turkey also disagrees with China on the state of the Uyghur minority in China and competes with it for influence in Africa and Central Asia.⁸¹ On September 2, 2024, Bloomberg reported that Turkey applied to join BRICS, although the outcome is still uncertain.⁸² The Turkish foreign minister later confirmed Turkey’s interest in BRICS membership and argued that “had Turkey been a member of the EU, it would not be in such a search.”⁸³  While disillusionment with the EU is one factor, Turkey’s BRICS application also stems from a desire to forge closer economic relations with the Global South, attract more investments from China, and strengthen leverage against the West. 

Some of China’s biggest technology companies, such as Xiaomi and OPPO, have built manufacturing plants in Turkey. In 2024, China’s BYD signed a $1 billion deal to build an EV manufacturing plant, giving it access to the EU car market thanks to Turkey’s proximity to the EU and the EU-Turkey Customs Union agreement. This investment also bears the potential to increase Turkey’s dependence on China-centered supply chains, which are shaped by major companies like BYD.⁸⁴ Turkey’s position in the United States-China technology competition will largely depend on whether it deepens its technology-related cooperation with European states. As of now, Turkish technology regulations draw mainly from EU regulations, hinting at a potential space for deepened cooperation with its European partners. However, these regulations constrain the activities of big technology companies, running the risk of straining relations with the United States under the Trump administration.⁸⁵ There is also the possibility of increased engagement with China in the technology space, especially if European investment is not forthcoming.   

More recently, Turkey sees an opportunity in the Middle Corridor, a transport route connecting Turkey to China through the Caucasus, the Caspian Sea, and Central Asia. While this idea dates back to the fall of the Soviet Union and the independence of the Central Asian republics,⁸⁶ there has been a surge of interest following the Russian invasion of Ukraine, which disrupted the Northern Corridor connecting Europe to China via Russia and reduced China-EU shipments by 40%.⁸⁷ Turkey is now involved in various initiatives to resolve the logistical problems associated with the Middle Corridor, including building an integrated rail and shipping network.⁸⁸ Central Asian countries seeking to diversify from Russia and China welcome increased Turkish involvement in the region as well as the Middle Corridor initiative, which has the potential to boost trade and connectivity. Turkey already ranks among the top four trade partners of all Central Asian states, is a major arms exporter, and is among the top 10 investors in the region. Turkey also argues that the Middle Corridor can be integrated into the BRI, though the Turkish business community remains skeptical given the trade deficit with China and limited Chinese investment.⁸⁹

Conclusions and Recommendations 

Like many middle powers in the changing international order, Turkey seeks strategic autonomy. In Turkey’s case, this means that its traditional Western orientation, rooted in the establishment of the Turkish Republic, is no longer the primary anchor for foreign policy. Instead, Turkey is working to diversify its options by forging closer ties with the Global South and China. Yet, as this report suggests, there are significant structural, ideological, and institutional constraints that limit how Turkey can achieve this. 

One key structural constraint is Turkey’s lack of the political-economic fundamentals needed to effectively operationalize an autonomous foreign policy. Its deficit-led economic growth model has fostered dependence on the import of intermediary goods and advanced technology, a trend that continues in the absence of an effective industrial policy. Furthermore, the structure of Turkey’s external trade relations requires a carefully formulated multidimensional outlook to manage multiple dependencies. Its most important non-Western trade partners, Russia and China, are not large export markets for Turkish entrepreneurs, leading to a highly asymmetric relationship that widens Turkey’s current account deficit. 

These structural limitations are compounded by ideological and institutional constraints that relate to Turkey’s domestic governance. Turkey is ruled by a populist authoritarian government that has pursued a largely anti-Western agenda both at home and abroad. The nature of the regime implies highly centralized decision-making with minimal checks and balances, eroding institutional and state capacity. This has discouraged investment not only from the West but also from China. Furthermore, foreign policy has been used mainly as a tool for regime security, fueling mistrust between Turkey and its European partners as well as the United States. This mistrust has weakened Turkey’s trade relations with the EU, which otherwise have the potential to offset some of Turkey’s structural political-economic constraints. It has also hampered security cooperation, as the EU has chosen to only selectively engage with Turkey on security and defense matters. 

Finally, Turkey’s efforts to balance its Western and non-Western partnerships face institutional constraints related to its history. As a NATO member, its efforts to diversify its security and defense partnerships beyond the West face certain limitations, not least in the technology realm. Similarly, its Customs Union agreement with the EU, though in a need of an upgrade, ensures that the EU remains Turkey’s largest trading partner and a critical counterpart on climate regulation.    

However, this final set of constraints can also be transformed into opportunities for the West in the broader competition with China. In all the policy fields discussed above, China only figures into three areas: a potential nuclear power plant construction agreement, an unlikely rare earth extraction agreement, and (so far) limited investment with some prospect for further cooperation in information and communication technologies. This suggests that there is still considerable scope for the West, and particularly the United States, to draw Turkey closer to the U.S. position on China. Turkey has the capacity to contribute to U.S. policies with its industrial know-how, reserves of critical materials, and growing presence in Africa and Central Asia — regions where it competes with China and where Western presence is not particularly strong.⁹⁰ Stronger U.S. support for the Middle Corridor and energy cooperation could provide key avenues for this engagement. Responsibility does not rest solely with the United States, however. The EU also emerges as a key actor that can strengthen Turkey’s foothold in the West by opening talks to modernize the Customs Union agreement and by engaging with Turkey more closely on energy and security. Although China’s engagement with Turkey remains limited, the window for Western influence may not stay open long, as Turkey continues to pursue closer ties with China. 

Yet much of the West’s hesitance, particularly in the EU, stems from lingering mistrust based in foreign policy spats that are closely linked to Turkey’s regime dynamics, such as its purchase of S-400s from Russia or its 2022-23 veto of Swedish and Finnish accession to NATO. Attaining regime security through foreign policy erodes long-term reliability and increases foreign policy volatility, making long-term coordination riskier. Although President Trump and his administration have been accommodating toward the regime, Turkey’s return to democracy and the rule of law should remain a key foreign policy priority in the long-term U.S. policy toward the country.