US exports to Iraq declined significantly in 2024, dropping 26.4% from $2.257 billion in 2023 to $1.662 billion – a decrease of $595 million.

Automotive sector growth: Despite the overall decline, US automobile and transportation equipment exports to Iraq surged by 42%, reaching $513 million in 2024 compared to $361 million in 2023.

Iraqi exports to US: Iraq’s exports to the United States decreased by 12% year-over-year, falling from $8.4 billion to $7.4 billion, with crude oil remaining the predominant export commodity.

Total trade volume: Bilateral trade between Iraq and the US totaled approximately $9 billion in 2024, down from $10.7 billion in 2023. Nevertheless, the trade balance remained favorable to Iraq by $5.7 billion.

Export Trends:

The sharp decline in overall US exports to Iraq was largely driven by reductions in exports of aircraft equipment, spare parts, and grains, outweighing gains made in the automobile and transportation sector. The growth in transportation-related exports highlights a shifting demand within the Iraqi market, potentially indicative of broader economic or policy changes.

Concurrently, Iraq’s exports to the US contracted by 12%, declining from $8.4 billion to $7.4 billion, with petroleum products continuing to dominate the export portfolio.

Consequently, the bilateral trade volume between Iraq and the US decreased to approximately $9 billion in 2024 from $10.7 billion in 2023. Despite this contraction, Iraq maintained a favorable trade surplus of $5.7 billion.

US Automotive Exports to Iraq

The import of used American vehicles to Iraq expanded dramatically in 2024, with over 22,450 vehicles valued at more than $255 million entering the Iraqi market. This represents a substantial increase from 2023, when approximately 12,600 vehicles worth $133.47 million were imported.

Three main factors underpin this surge:

1. Recent amendments to Iraqi legislation now permit the importation and domestic repair of used vehicles—a practice previously prohibited. Previously, most used American vehicles underwent repairs in neighboring countries such as the UAE and Jordan before being re-exported to Iraq.

2. Increased demand within the Iraqi market for American-made vehicles has also contributed significantly to this rise in import volumes, reflecting broader consumer preferences and market dynamics.

3. The significant Iraqi diaspora living in the United States plays an increasingly important role in this trade relationship. Many Iraqi expatriates purchase used American vehicles and arrange for their shipment to family members or business associates in Iraq. This diaspora-driven channel has expanded substantially in recent years, creating efficient informal networks that facilitate vehicle transfers while strengthening commercial ties between the two countries.

This diaspora connection not only increases the volume of exports but also helps establish American vehicle brands in the Iraqi market through personal recommendations and family connections, further driving the growing preference for US automobiles among Iraqi consumers.