Syria's 300 percent customs duty hike angers Turkish businesses
The new Syrian government’s decision to raise customs duties on products imported from Turkey by up to 300 percent has sparked anger among Turkish exporters and stirred public discontent this week.
The interim government, established after the collapse of Syrian president Bashar al-Assad’s government last month, announced plans to unify customs duties across its borders, which previously had different rates for Turkey and Arab countries.
Under the Assad government, customs duties were significantly higher at the borders with Lebanon, Iraq, and Jordan, whereas Turkish border crossings, controlled by the opposition, imposed minimal or no duties.
On 11 January, the Syrian government reduced customs duties on goods from Arab countries by up to 60 percent, while increasing duties on Turkish imports by up to 300 percent, applying a uniform rate across all neighbouring countries. This decision has drawn criticism from Turkey’s business community.
“Does this politically motivated decision show that we are not as influential in Syria as we think we are?” asked Iris Cibre, a financial markets executive, adding that Turkey’s annual exports to Syria amount to $2bn.
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Turkey has long been a key player in Syria, supporting the Syrian opposition for the past 13 years. However, this stance has been controversial domestically, as Ankara faces pressure due to the presence of three million Syrian refugees.
Critics in Turkey’s opposition have questioned whether Ankara truly wields influence in Damascus, despite widespread assumptions to the contrary amongst international observers.
Wide-ranging impact
The Ekonomim daily reported on Thursday that exports from Turkey to Syria have nearly ground to a halt.
Celal Kadooglu, president of the Southeastern Anatolia Grain, Pulses, Oilseeds, and Products Exporters' Association, warned that the decision puts several sectors - particularly grains, pulses, oilseeds, and other food products, which make up a significant share of Turkey’s exports to Syria - at risk of serious losses.
Exporters fear losing competitiveness and long-standing business connections due to the steep tax hike.
Kadooglu also highlighted the broader implications of the policy, saying, “This decision means Syrian citizens will face severe inflation, effectively nullifying their purchasing power.”
Business figures close to the Turkish government have also voiced disapproval. Nihat Ozdemir, owner of the Limak Group, a major construction conglomerate, warned that the increased duties would severely impact their main business products, such as cement.
“If Syria implements the reported customs duty increases, it means $27 in taxes will be levied on cement we export for $50. This is an extremely high tax,” Ozdemir said.
The Turkish Ministry of Trade confirmed on Friday that Syria has implemented the new system, denying that Turkey was being singled out. The ministry added that it was in talks with Syrian officials to ensure continued access to essential goods for the Syrian population.
“As part of these discussions, a face-to-face meeting is scheduled for next week,” the ministry announced. “Additionally, there is mutual interest in implementing a new and more comprehensive free trade agreement between our two countries.”
A Turkish official told Middle East Eye that one of the reasons for the customs hike was to generate more income for the Syrian government, which has been financially strained by 13 years of civil war and international sanctions.
'Unfair competition'
Muhammed Akta, general manager of Turkey-based Federation for International NGOs, explained that after Assad’s government collapsed, Turkish goods flooded markets across Syria, including cities like Hama, Homs, and Damascus.
'This decision means Syrian citizens will face severe inflation, effectively nullifying their purchasing power'
- Celal Kadooglu
“Turkish products with low duties had a significant price advantage, making them much cheaper. They dominated markets across the country,” Akta told MEE. “This triggered complaints from Jordanian and Lebanese businesses about unfair competition due to Turkey’s customs advantage.”
Akta, who is closely involved in Syrian affairs, noted that Damascus initially allowed Turkish products to dominate the market to help the local population access affordable goods. However, it now feels compelled to act.
“Yet the decision has also been unpopular in northern Syria, where Syrian businessmen who had struck deals to import Turkish products now face higher prices and are unable to turn a profit under the new duties,” he added.
Recent protests near border crossings have highlighted the discontent. The Turkish official suggested that negotiations might lead to a reduction in duties in the near future.
“The Syrian government may take steps to alleviate the situation as talks progress,” the official said.
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