- Trump's 14 per cent tariff hike threatens Nigeria’s $10 billion annual exports to the US, impacting crude oil and agricultural trade
- Other African nations, including Kenya, Ghana, and South Africa, also face tariff hikes, sparking fears of retaliatory measures and global economic instability
- Nigerian-American Chamber of Commerce (NACC) and economic analysts predict job losses, higher consumer prices, and reduced trade volumes
The recent 14 per cent tariff imposed by former US President Donald Trump on Nigerian exports poses a major risk to the $10 billion annual trade between both nations, particularly affecting key sectors like crude oil and agricultural exports.
Trade analysts warn that this policy shift could disrupt international commerce, slow manufacturing, and reduce Nigeria’s oil demand in one of its most crucial markets.
Economic experts have voiced concerns that Nigeria’s oil revenue could suffer significantly under this new tariff regime.
Sheriff Balogun, the National President of the Nigerian-American Chamber of Commerce, stated that Nigeria has exported an estimated $277 billion worth of goods to the US under the African Growth and Opportunity Act (AGOA) since 2000, with crude oil comprising the bulk of these exports.
Trump’s sweeping trade policy shift
Trump’s announcement, made during a “Make America Wealthy Again” event, marked a dramatic departure from decades of free trade policies.
The decision, which has been widely criticised by the European Union and other exporting nations, imposes tariffs as high as 50 per cent on goods entering the US.
The Trump administration justified the move by claiming that Nigeria imposes a 27 per cent tariff on US exports, which it considers a disadvantage to American businesses.
The new reciprocal tariffs, calculated based on trade deficits, are aimed at correcting what Trump described as unfair trade practices.
“This is a historic moment for America.
“We are entering a new era of fair trade, strengthening domestic industries, and opening foreign markets,” Trump declared.
Implications for Nigeria’s economy
The tariff hike could severely impact Nigeria’s oil exports, which form the backbone of its trade relationship with the US.
A report by Afreximbank suggests that a 14 per cent tariff will likely reduce oil demand and foreign exchange earnings.
Moreover, tariffs on imports like wheat and vehicles may further drive up domestic prices, intensifying economic hardships.
Trade data from Nigeria’s National Bureau of Statistics shows that between 2015 and 2024, total trade between Nigeria and the US reached N31.1 trillion, with Nigeria recording a trade surplus of N1.64 trillion.
However, these figures could decline under the new trade policy.
Despite concerns, Johnson Chukwu, CEO of Cowry Asset Management Limited, noted that Trump has exempted energy products, including crude oil, from the tariff hikes.
However, he warned that broader global economic slowdowns could still lead to reduced crude oil demand and lower prices, ultimately affecting Nigeria’s projected revenue.
Broader global consequences
Experts warn that these tariffs could trigger inflation in the US, disrupt global supply chains, and weaken economic growth.
Muda Yusuf, the CEO of the Centre for Promotion of Private Enterprises, argued that the trade war could lead to increased costs for US imports into Nigeria, further straining consumers.
Sola Obadimu, Director General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, urged Nigeria to focus on domestic economic growth rather than reacting to US trade policies.
He emphasised the need for industrialisation, infrastructure development, and local job creation to counter the impact of external trade disruptions.
Aside from Nigeria, some African countries that will bear the brunt of the new policy include Algeria (30 per cent); Lesotho (50 per cent); Mauritius (40 per cent); Kenya (10 per cent); Namibia (21 per cent) and Ethiopia as well as Ghana 10 per cent apiece. South Africa was handed down a reciprocal tariff of 30 per cent.
Other countries, including China, got 34 per cent, India (26 per cent), South Korea (25 per cent), Japan 24 (per cent), Taiwan (32 per cent), United Kingdom (10 per cent), Vietnam (46 per cent), Switzerland (31 per cent), Cambodia 49 (per cent) South Africa (30 per cent), Indonesia (32 per cent), Brazil (10 per cent) and Singapore (10 per cent).
Trump said the baseline 10 per cent tariff would start on April 5, while higher rates on various partners would begin on April 9.
IMF warns of global risks from Trump’s proposed economic policies
Meanwhile, TheRadar earlier reported that the International Monetary Fund (IMF) raised concerns over potential global economic disruptions stemming from the policies of incoming U.S. President Donald Trump.
The IMF highlighted that Trump’s proposed tariffs could escalate trade tensions, disrupt supply chains, and distort trade flows.