Baghdad traders protest steep tariffs as oil revenues shrink

Hundreds of traders and customs‑clearance company owners gathered outside the General Customs Directorate in central Baghdad on Sunday to demand a reversal of new customs tariffs that took effect Jan. 1. The protesters said the measures, imposed as the government seeks to cut debt and reduce reliance on oil after a fall in prices, have sharply increased costs for importers and disrupted the flow of goods.

Traders described wide swings in charges that have transformed basic logistics costs into potential impediments to trade. "We used to pay about 3 million dinars per container, but now in some cases they ask for up to 14 million," said Haider al‑Safi, a transport and customs clearance company owner. He added that "even infant milk fees rose from about 495,000 dinars to nearly 3 million," examples that underscored traders' fears about rising consumer prices.

Authorities have framed the tariff changes as part of a broader fiscal correction. Iraq faces debt of more than 90 trillion Iraqi dinars ($69 billion), and the state budget remains dependent on oil for about 90% of its revenues, officials say. Traders and business groups counter that abrupt increases will be passed on to consumers who are already strained by compressed wages and household costs.

"The main victim is the citizen with limited income, and government employee whose salary barely covers his daily living, those who have to pay rent, and have children with school expenses — they all will be affected by the market," said Mohammed Samir, a wholesale trader from Baghdad, summarizing concerns about social impact.

Protesters chanted slogans against corruption and rejected the fees; banners in some commercial districts read "Customs fees are killing citizens." Shop owners staged a concurrent strike in several parts of the capital, leaving markets shuttered in major commercial districts for the day, according to local accounts. Traders also warned of mounting backlogs at ports, with goods piling up at Umm Qasr in southern Iraq as importers delay clearances and reassess routes.

Among the tariff changes cited by business groups were increases reaching, in some cases, as high as 30 percent and the imposition of a new 15 percent fee on electric vehicles that had previously been exempt. Those shifts have prompted some importers to consider rerouting consignments through the Kurdistan region, where they say fees are lower, a move with potential political and logistical implications for federal‑regional trade.

Opponents of the tariff decision have filed a lawsuit seeking to roll back the new terms, and Iraq's Federal Supreme Court is set to rule on Wednesday. The legal challenge adds a high‑stakes judicial test to an unfolding economic and political debate over how Baghdad adapts to tighter finances without triggering wider social unrest.

Beyond immediate disruptions to commerce, the protests illuminate a deeper tension in Iraq's fiscal transition: how to broaden revenue sources and reduce oil dependency while shielding vulnerable households from sudden price shocks. Traders warned that without clearer schedules, targeted exemptions or phased implementation, higher tariffs risk entrenching informal practices and incentivizing alternate, potentially unlawful channels to avoid costs.

For now, the standoff leaves ports congested, markets tense and a business community pressing the government for rapid clarification on tariff schedules and enforcement, even as officials weigh the narrow fiscal gains against broader economic stability.