•Says tariff may impact competitiveness of Nigerian goods •FG expanding alternative market access opportunities
•Nigeria may deepen trade relations with China, EU, BRICS —Fund Managers
•Development may create new opportunities, but… —LCCI •‘Trade war will affect crude oil price–CPPE
•Govt must act fast to avoid job losses
The Federal Government has disclosed that it is consulting with the United States and the World Trade Organisation (WTO) to evolve a mutually beneficial solutions to the 14 percent tariff imposed on Nigerian export by U.S.
The government stated that it considers the United States a valued trade and investment partner, bound by shared values and mutual economic interests, while acknowledging the recent tariff imposition.
The Federal Government position was conveyed by the Minister of Industry, Trade and Investment Dr. Jumoke Oduwole on Sunday through a press statement in Abuja.
According to Dr. Oduwole, “The Federal Government acknowledges the recent tariff measures announced by the government of the United States, including imposing a 14 per cent tariff on Nigerian exports.
“Nigeria remains actively engaged in consultations with U.S. counterparts and the WTO, approaching evolving trade dynamics with pragmatism and a commitment to mutually beneficial solutions”.
She pointed out that “The Federal Government considers the United States a valued trade and investment partner, bound by shared values and mutual economic interests,” and stressed that “The U.S. Ambassador’s visit to the ministry recently, reaffirmed our joint commitment to strengthening economic ties that benefit both economies.”
According to her, while oil has long dominated Nigeria’s exports to the U.S, non-oil products many previously exempt under African Growth and Opportunity Act (AGOA), now face potential disruption.
Acknowledging that “A new 10 percent tariff on key categories may impact the competitiveness of Nigerian goods in the U.S. for businesses in the non-oil sector.”
Dr. Oduwole highlighted that “The government is also expanding alternative market access opportunities and ensuring off-take diversification to reduce and mitigate trade risks.”
She explained that “Nigeria’s exports to the U.S. over the last two years has consistently ranged between five to six billion dollars annually. A significant portion over 90 percent comprises crude petroleum, mineral fuels, oils and gas products.
“The second-largest export category, accounting for approximately two to three per cent, includes fertilisers and urea, followed by lead, representing around one per cent of total exports.
This is valued at approximately 82 million dollars”.
The minister said President Bola Tinubu has since May 2023, remained actively committed to attracting and retaining much-needed investments from old and new friends of Nigeria.
She stressed that the Federal Government was implementing a range of interventions in policy, financing, infrastructure and diplomacy to help Nigerian businesses remain competitive amidst regional and global tariff hikes.
Oduwole said Nigeria also exported smaller quantities of agricultural products such as live plants, flour and nuts, which account for less than two per cent of total exports to the U.S.
The minister acknowledged that the tariff measures present destabilising challenges to price competitiveness and market access, especially in emerging and value-added sectors vital to diversification agenda.
She noted that Small Medium-size Enterprises (SMEs) building their business models around AGOA exemptions would face the pressures of rising costs and uncertain buyer commitments.
However, the Minister said the development would boost Nigeria’s non-oil exports as well as meeting global standards and improving market acceptance into more economies across the globe.
Also, she emphasised the urgent need to enhance intra-African trade through the African Continental Free Trade Area (AfCFTA), adding that the ministry was committed to ensuring a strong conducive business environment.
Dr. Oduwole pledged the Federal Government’s firm commitment to building economic resilience and accelerating export diversification.
According to Johnson Chukwu-led fund managers at Cory Assets Management Limited, Nigeria may strengthen trade ties with China, the European Union, and the BRICS nations (Brazil, Russia, India, China, and South Africa) to offset the negative impact of US tariffs.
This strategic shift could reshape Nigeria’s global trade landscape and foster economic cooperation with emerging markets.
For instance, the tariff on Nigerian exports by the United States poses a significant threat to the African Growth and Opportunity Act (AGOA) framework, a trade pact aimed at promoting economic cooperation between the US and sub-Saharan African countries.
The tariff hike could undermine the benefits of AGOA, which has facilitated duty-free access to the US market for eligible African countries, including Nigeria.
U.S. total goods trades with Nigeria were $9.9 billion in 2024. U.S. goods exports to Nigeria in 2024 were $4.2 billion, up 61.4 percent ($1.6 billion) from 2023. U.S. goods imports from Nigeria in 2024 were $5.7 billion, up 0.1 percent ($7.0 million) from 2023. The U.S. goods trade deficit with Nigeria was $1.5 billion in 2024, a 50.9 percent decrease ($1.6 billion) over 2023 according to the office of the United States trade representative.
This development may compromise the competitiveness of Nigerian exports, particularly in the textile and manufacturing sectors, and potentially jeopardize the country’s $1.5 billion trade surplus with the US.
The U.S. President Donald Trump announced a 14 percent tariff on imports from Nigeria, as part of a sweeping protectionist policy targeting multiple countries. The initiative includes a baseline 10 percent tariff on all imports into the United States, with steeper rates imposed on specific nations. The White House claims the move is designed to correct trade imbalances and bolster domestic manufacturing.
However, the policy has sparked widespread concern over its implications for international trade and diplomatic relations.
At the heart of these concerns lies the African Growth and Opportunity Act (AGOA), which since 2000 has granted duty free access to the U.S. market for eligible Sub-Saharan African countries, including Nigeria.
The newly imposed tariffs place the future of this trade framework in jeopardy.
Nigeria, a major AGOA beneficiary, has used the preferential access to expand its exports in apparel, agricultural produce, and select manufactured goods. Now, that progress stands threatened.
The announcement has already roiled financial markets, triggering a wave of volatility across major U.S. stock indices.
Economists warn that the tariff escalation could undermine global economic growth, raise consumer prices, and provoke retaliatory actions from affected nations. Indeed, both the European Union and China have hinted at potential countermeasures, fuelling fears of a broader trade war. Nigeria, Africa’s largest economy and a longstanding trade partner of the United States, is particularly exposed to the fallout.
The fund managers in an e-mailed response noted that, “The bilateral relationship spans crude oil, agricultural goods, machinery, vehicles, and services”.
In 2024, Nigeria’s exports to the U.S totalled N5.52 trillion, while imports—largely crude oil, butanes, and used vehicles— from Nigeria stood at N4.07 trillion, according to the National Bureau of Statistics.
These figures have historically fluctuated in response to oil prices, shifts in U.S. energy policy, and domestic economic conditions.
As global trade dynamics shift under this new wave of U.S. protectionism, the resilience of Nigeria’s economy will be put to the test.
“We think that President Trump’s 14 per cent reciprocal tariff has cast a shadow over the stability of this trade partnership. While the move is framed as a strategy to safeguard American industry, it risks triggering broader friction, especially if Nigeria responds by exploring alternative trade alliances with China, the European Union, or BRICS countries.
“Beyond trade, U.S. investment in Nigeria spans vital sectors including oil, technology, and finance. American giants such as Chevron, ExxonMobil, and Microsoft maintain a strong presence in the Nigerian market. But growing trade tensions could dampen investor confidence and strain diplomatic ties unless carefully managed,“ the analysts stated.
From a macroeconomic perspective, the imposition of the tariff threatens to exacerbate Nigeria’s existing vulnerabilities. Reduced export earnings, particularly from non-oil sectors, could diminish foreign exchange inflows, heightening pressure on the naira.
This could deepen Nigeria’s foreign exchange liquidity crisis, potentially forcing the Central Bank to deplete its already stretched reserves or tighten currency controls.
According to Cowry Assets Management analysts, inflation is also likely to accelerate, as Nigeria may be compelled to source critical imports like wheat, pharmaceuticals, and industrial machinery from more expensive markets. This would elevate input costs, worsen food inflation, and erode purchasing power.
“On the geopolitical front, the tariff may prompt Nigeria to recalibrate its foreign policy—deepening ties with alternative partners such as China, the European Union, and the BRICS bloc. It may also look inward, seeking stronger regional cooperation within ECOWAS and the African Union to establish new trade corridors and collective negotiation frameworks,“ they warned.
The Centre for the Promotion of Private Enterprises (CPPE) said that the recently introduced tariffs by the United States President Donald Trump would dampen global growth outlook and lead to a decline in oil price which could impact Nigeria’s foreign reserves and revenue.
In a statement sent to the Nigerian Tribune at the weekend, Director/Chief Executive Officer of the CPPE, Dr. Muda Yusuf said that the trade war could throw new opportunities for new trade partners globally for emerging economies, with many countries that are victims of the trade war seeking new bilateral trade relationship which may create opportunities for Nigerian investors.
Trade war will affect crude oil price —CPPE
According to the CPPE, “The vulnerability of the Nigerian economy to shocks of the current trade war unleashed by President Trump may be very limited. Averagely, Nigeria’s external trade exposure to the United States is averagely about 10 percent.
“In 2024, Nigeria’s total merchandise export was valued at 50.4 billion dollars and Nigeria export to the United States same year was 5.7 billion dollars, which was 11.3 percent. Tariff effect on about 10 per cent of total export is unlikely to cause a major upset in the Nigerian economy.
“Nigeria major exports to the US are crude oil, petroleum gas, nitrogenous fertiliser. While major US export to Nigeria are mainly vehicles, wheat, and fuels.
“Other major export destinations for Nigeria products are Spain, France, Netherlands, and Italy. Oil and gas products account for close to 90 per cent of Nigeria export. This has being the position for about three decades.
“However, the Nigeria economy may be affected indirectly in some other ways. The Trump administration has practically brought closure to the AGOA trade window.
Secondly, the trade war and the subsequent retaliatory tariffs would trigger inflationary pressures in the United States. This may result in elevated costs for imports into Nigeria from the United States.
“Thirdly, we are likely to witness some level of disruptions in global supply chains resulting from the tariff war. This could dampen the global growth outlook and affect crude oil price. A decline in oil price would impact Nigeria’s foreign reserves and revenue.
“The worsening inflation outlook for US economy may trigger monetary tightening by the US Federal Reserve. This may lead to higher interest rates and trigger portfolio flow reversals in emerging economies. This could have implications for naira exchange rate.
“But there are also opportunities for new trade partners globally. Many countries that are victims of the current trade war would seek new bilateral trade relationship which may create opportunities for Nigerian investors.”
Development may create new opportunities, but… —LCCI
As reactions continue to trail the decision of the US President, Donald Trump, to impose additional tariffs on imports, the Lagos Chamber of Commerce and Industry (LCCI) said the development may create new trade opportunities for many countries, including Nigeria, if well managed.
The Chamber, however, warned that the trade war between the United States and its largest trading partners – Canada, Mexico, and China, may also lead to a complex trade landscape for businesses.
The organisation believed taking advantage of such situation will, however, depend on the positioning of Nigeria, and its ability to manage such complexities.
It argued that the situation could present the much-needed opportunity for the country to boost its exports of the tariffed products to the United States, China, Canada, Mexico, and other markets.
On how Nigeria can shield its economy from being hurt as a result of the trade war, the Chamber stressed the need for the country to continue to monitor and strategise on the complex interplay of trade dynamics and economic forces.
“For instance, we must clearly understand the products targeted by the United States, Canadian, and Mexican tariffs and see how we can quickly expand the production of substitute exports to the tariffed products and substantially grow the country’s export,” it added.
It also noted that though the tariff increase is expected to boost domestic production in the United States in sectors like automobiles, steel, and aluminum industries, it may, however, result in a wave of inflation in the country, due to an increase in the prices of agricultural products, energy, and electronics.
“As a result of inflationary pressures, interest rates may remain higher for longer,” it stated.
The Chamber also predicted an economic downturn in the world’s largest economy, with its attendant disruption of the supply chains, leading to an overall price rise.
“We may also see inflationary pressures coming stronger on the back of cutting off of some supplies hitherto imported from China,” it predicted.
Experts say global economy may slip into recession
Professor of Finance and Capital Market, Uche Uwaleke, however, argued that such retaliatory measures could result in the possibility of the global economy slipping into recession, as a result of supply chain disruptions, insisting the time is now ripe for the African continent to begin to look inwards.
He added that the likelihood of a global recession is hinged on happenings in the global market, especially with the fall of the equity markets in the US, and the dollar index, used to track the value of the dollar against major world currencies.
Professor Uwaleke expressed the belief that the US President’s action will not only impact US economy, but will have ripple effects across the globe.
“We are beginning to see it. Retaliatory measures are being announced. The Prime Minister of Canada is also saying that they will also impose tariffs on US cars coming into the country. France said they are going to do industry by industry, even advising their investors not to invest in US. In the case of China, US imposed 34 percent earlier on they had done 20 percent, which makes it 54 percent. And they are saying they would retaliate,” he stated
The Capital Market guru however believes the country should not panic since the 14 percent tariff imposed on it is a little bit above the baseline.
“Besides, from the volume of trade, the export we do to the US is minimal. In 2023, we exported goods worth $ 5.5 billion out of which over $ 4.5 billion was oil. Our product to US is substantially oil, and the rest is Agriculture, cashew nut, rubber and others. They didn’t amount to anything substantial in 2023,” he argued.
Uwaleke however believed the country should look inward, by strengthening intra-trade policies.
He also called on the African Union (AU) to see this as an opportunity to form a united front to see how much they can advocate for the renewal of AGOA (African Growth and Opportunity Act), expected to expire by September, this year.
Since its enactment in 2000, AGOA has been at the core of U.S economic policy and commercial engagement with Africa, providing eligible sub-Saharan African countries with duty-free access to the U.S market for over 1,800 products, in addition to the more than 5,000 products that are eligible for duty-free access under the Generalised System of Preferences program.
However, Uwaleke warned that if this is not renewed, by September, this year, the development will hit hard on many African countries, particularly those with very high tariff rates like Lesotho, a small landlocked country, slammed with 50 percent tariff by the U.S government.
Uwaleke also advised the managers of the nation’s economy to seek new friends.
“Trade relations do not have to be with the West alone. Look towards the East, South, China, India, Japan, and others, to see how we can increase our trade volume. It doesn’t have to be US.
“A bulk of what comes in here as Foreign Portfolio Investments (FPIs) comes from US and UK all the time. But if you look at some countries with huge Foreign Direct Investments (FDIs), like India, and Malaysia, the bulk of their FDIs, not portfolio, not hot money, come from Singapore, Netherlands, Mauritius, and others. So we should reach out. Diversification is the word,” he added.
Professor Uwaleke would also want the nation’s companies, likely to be directly impacted by the policy, protected by the government, adding that while the volume of trades involved may be small, the companies directly involved will, without doubt, be affected.
“We should borrow a leaf from what others are doing. Spain for example has announced $14 billion trade assistance in response to this tariff, Spain is one of the European countries facing 20 percent tariff. So Nigeria can have an intervention fund to assist these companies that are likely to be affected,” he added.
In his own reaction, the Chief Executive Officer of Wealthgate Advisors, Mr. Biyi Adesuyi, would want government to act quickly, so that the new tariff will not lead to job losses in the affected sectors.
He believed the 14 percent tariff imposed on the United States’ imports from Nigeria will certainly make its exports more expensive in the American market.
Adesuyi also argued that the new tariff may disrupt the nation’s major exports to the US which are crude oil, petroleum gas and fertilizers.
“If Nigeria retaliates with higher tariffs, the imports from the US that will be affected are used vehicles, spare parts and military weapons.
“The higher tariffs will make exports costlier for the buyers in America. If the US importers get cheaper goods from other countries with lower tariffs, they will reduce their demand for Nigerian goods,” he stated.
The Wealthgate Advisors would also want the country to begin to look for other markets for its petroleum exports.
Alternatively, he would want the Nigerian Government to reduce its tariffs on US imports and renegotiate with the US Government to also reduce its tariffs on imports from Nigeria.
Adesuyi believed that will serve as a huge relief for the Nigerian economy while also helping a company like Dangote Refinery that has begun to export jet fuel to the United States.
“The US is a big market that the new Refinery must not lose,” he added.
