Turkey 40% additional customs duty on Chinese-origin vehicles (Presidential Decree 8639)

Mechanism

Türkiye's existing import-tariff architecture for passenger vehicles already includes a 10% MFN customs duty on Chinese-origin cars (no FTA, unlike EU imports which clear duty-free under the EU-Turkey Customs Union). Decree 8639 adds an İlave Gümrük Vergisi (additional customs duty) layer of 40% ad valorem with a USD 7,000-per-vehicle floor on top of that 10% base.

Stated authority: Article 16 of Customs Law No. 4458 and Article 22 of the Import Regime Decision (İthalat Rejimi Kararı), under which the President may impose additional duties on imports for industrial-policy or balance-of- payments reasons. The decree's preamble cites the current account deficit and the goal of expanding domestic vehicle production share.

Coverage spans all Chapter 8703 fuel types (gasoline, diesel, hybrid, PHEV, BEV) — broader than the EU's October 2024 countervailing duties which target only BEVs. The USD 7,000 floor is binding for cheaper segments (sub-USD 17,500 vehicles where 40% ad valorem < $7,000), affecting low-end Chinese ICE and entry BEV models more than premium imports.

Investment Incentive Certificate carve-out: Chinese OEMs that commit to on-shore assembly under a Yatırım Teşvik Belgesi can import without the additional duty. BYD's USD 1bn Manisa plant agreement (announced July 2024) explicitly leverages this carve-out and exemption was extended via subsequent ministerial decisions through 2025.

Severity 4 (quant basis): the combined 50% effective duty on CIF value with a $7,000 floor is high enough to materially deter direct imports and compress Chinese OEM market share, mirroring the protective level of the US Section 301 100% EV tariff. December 2024 amendment raised the additional duty to 50% on ICE/hybrid (combined ~60% with base) effective 1 January 2025; BEVs remained at 40%.

Downstream implications

• First major Turkish trade-defence action against Chinese auto imports;

Türkiye becomes the third major non-US, non-EU economy (after Brazil's IPI restoration and India's customs duties) to erect a 40%+ EV tariff perimeter against Chinese OEMs.

• Pulls Chinese OEM capex into Türkiye: BYD Manisa announced 8 July 2024

(USD 1bn, 150k unit annual capacity, target 2026); Chery is in negotiation for a Samsun plant; Skywell already operates a JV with Karsan. Sector-allocators should watch Türkiye as a Chinese-OEM production hub serving the EU customs union (zero-tariff EU access from Türkiye-assembled vehicles).

• Domestic incumbent Togg (TOGG Mobility / BMC-Anadolu Group / Tata

Technologies-engineered) gains explicit policy protection; Tofaş (Stellantis JV) and Ford Otosan (also benefits from the EU-Turkey customs union) gain price-shadow protection.

• Reduces Türkiye's near-term automotive trade deficit. Chinese passenger-

car imports rose from ~3% of total in 2022 to ~10% by Q1 2024, contributing to Türkiye's persistent current-account deficit. Expected ~50% drop in direct Chinese unit imports through 2025.

Open questions

• Will the December 2024 increase to 50% apply uniformly or maintain the

ICE/hybrid vs BEV asymmetry through 2026?

• How quickly will Chinese-OEM assembly in Türkiye scale to compensate for

the import compression, and at what local-content threshold?

• Does the EU-Turkey Customs Union require Türkiye to align with the

October 2024 EU CVD methodology (origin-of-production rules) for Türkiye-assembled Chinese-brand vehicles re-exported to the EU?