Professor of International Economics Nuwar Al-Saadi explained that the customs tariffs imposed by U.S. President Donald Trump on Iraq will have a complex impact on the domestic economy. He predicted that this step could mark the beginning of a reshaping of trade relations between Washington and Baghdad and called for urgent action in three directions.

Al-Saadi said, “The impact of this decision on Iraq's internal economy will be complex. On one hand, the few Iraqi exporters who send products to the U.S. market will be harmed. While the total quantities are limited, the more serious message here is that Iraq still lacks a diversified or strong export base that allows it to negotiate or maneuver.”

He pointed out that “local production capable of competing in foreign markets remains minimal, and Iraqi exports still rely on oil for more than 90%. This means that any restrictions on non-oil exports—even from one country—expose the overall weakness of the economic structure.”

On the external front, Al-Saadi indicated that “the decision affects Iraq’s reputation in international markets. Imposing tariffs of this kind is rarely purely commercial—it usually involves political considerations or U.S. assessments of Iraq’s compliance with trade standards, regional role, or even its stance on American sanctions against countries like Iran or Russia.”

He added, “In other words, this move could be the beginning of broader tightening or a redrawing of trade relations between Washington and Baghdad within a wider political context. As such, the ramifications may extend to Iraq’s relationships with other partners, both in the West and the region.”

Based on this, Al-Saadi argued that Iraq needs to act urgently in three areas:

1. Diplomatic Engagement: Establish direct channels with Washington to clarify the negative impacts of the decision and negotiate exemptions for certain goods, reduction of the tariff rate, or delayed implementation.

2. Diversifying Trade Partners: Expand the export base to alternative markets such as China, India, Turkey, and even the Gulf states. This requires industrial policy reform and direct support for local products to make them viable for export.

3. Building a Clear National Trade Policy: One that prioritizes Iraq’s economic interests, reduces dependence on any single international party, and revives bilateral and regional trade agreements—especially since Iraq currently lacks an effective trade strategy to represent its interests in foreign negotiations.

Al-Saadi concluded by saying this decision should serve as a wake-up call for Iraq to reassess its economic reality and understand that an economy reliant solely on oil cannot withstand global shifts or political tensions for long. “Building a productive and diversified economy is not a luxury—it’s an urgent necessity,” he said.

Earlier today, President Donald Trump announced the imposition of 30% customs tariffs on Iraq, Algeria, and Libya. According to Reuters, Trump issued a series of memos concerning tariffs on six countries, including Algeria, Brunei, Iraq, Libya, Moldova, and the Philippines. The memos propose tariffs of 30% on Algeria, 25% on Brunei, 30% on Iraq, 30% on Libya, 25% on Moldova, and 25% on the Philippines.