The newly imposed 14 per cent tariff by US President Donald Trump on exports by Nigerian businesses presents a significant risk to the $10bn annual exports to the United States, potentially disrupting key sectors such as oil export and agricultural trade, experts and trade associations concerned about a potential global trade war stated on Thursday.
The economic experts, in separate interviews with The PUNCH, noted that the policy, which would raise the prices of goods and services for consumers, would weaken the standard of living, slow down manufacturing activities, hinder international trade and consequently weaken demand for Nigerian oil in the US, one of its key markets.
The experts also predicted that Nigeria’s oil earnings were poised for a significant decline following the announcement of the new tariff regime.
In an interview with The PUNCH, the National President of the Nigerian-American Chamber of Commerce, Sheriff Balogun, stated that since the inception of the African Growth and Opportunity Act in 2000, Nigeria had exported an estimated $277bn worth of goods to the United States, with crude taking the majority.
Nigeria’s exports to the United States currently average between $10bn and $12bn annually, although it has been fluctuating in recent years, according to US and Nigerian trade data.
“This is one of the most important days in American history,” Trump said. “We will supercharge our domestic industrial base. We will pry open foreign markets and break down foreign trade barriers, and ultimately, more production at home will mean stronger competition and lower prices for consumers.
“This will be, indeed, the golden age of Americans coming back. We are going to come back very strongly.”
Responding to the development, NACC president Balogun warned that the policy could impact trade volumes worth $277bn.
“Since the African Growth and Opportunity Act began in 2000, Nigeria has exported an estimated $277bn worth of goods to the United States under the programme,” he stated. “The vast majority of this trade value comes from crude oil shipments, with petroleum products overwhelmingly dominating Nigeria’s AGOA exports each year. In fact, oil alone accounts for nearly all of Nigeria’s exports under the initiative by value.”
Economic experts say this move threatens Nigeria’s exports to the US, particularly petroleum goods, its major export product. With oil accounting for the bulk of Nigeria’s export revenue, the move could exacerbate economic challenges, including a weaker naira and rising inflation. Additionally, reciprocal tariffs on imported goods like wheat and vehicles could further drive up local prices, compounding the financial strain on businesses and consumers alike.
According to Afreximbank research, the 14 per cent reciprocal tariff will reduce oil demand and lower forex earnings, while higher tariffs on wheat and vehicles may increase local prices; key exports include oil, cocoa, and rubber, while key imports include wheat, refined petroleum, and vehicles.
It added that these tariffs could reduce export revenues, increase production costs, and disrupt investment flows, particularly for nations heavily reliant on US trade.
Nigeria’s main exports to the U.S. included crude petroleum, petroleum gas, and nitrogenous fertilisers, flour and meals of soya beans, urea, refined lead, flowers buds and natural gas, while the western country mainly exported cars, refined petroleum, and wheat to Nigeria.
According to the National Bureau of Statistics, Nigeria’s trade with the United States reached a combined N31.1 trillion in ten years between 2015 and 2024. An analysis of the foreign trade report showed that N16.4tn was recorded as exports and N14.71tn in imports, indicating a trade surplus of N1.64tn
A breakdown showed that Nigeria exported goods worth N344.27bn in 2015 and received N581.99bn as imports. In 2016, it increased to N1.03tn in exports and N706.09 in imports. Exports surged to N1.73tn in 2027, N1.094tn in 2018, N1.01tn in 2019 before dropping to N382.19bn in 2020 due to the pandemic. By 2021, exports increased to N800.34bn, N1.82tn in 2022, N2.61tn in 2023 and N5.52tn in 2024.
The tariffs also come just as the US began importing jet fuel from Nigeria’s Dangote Refinery, with six vessels carrying 1.7 million barrels arriving this month.
The CEO, Cowry Asset Management Limited, Johnson Chukwu, explained that crude oil exports from Nigeria may remain unaffected by the tariff.
The economist noted that as countries adjusted to the new trade landscape, the cost of goods and services would rise, leading to a lower standard of living and a slowdown in manufacturing and international trade.
“However, at the general level, what Trump has done would trigger a higher cost of goods and services globally because countries would add it to their economies and it will be borne by final consumers. So, prices will go up in almost all the jurisdictions, the standard of living will weaken, manufacturing activities will slow down, and international trade will slow down. Ultimately, where it will affect Nigeria is that the demand for crude will decline because production will go down, and once the demand reduces, it means the price will come down and likely affect the projected revenue from crude sales this year. We are not a strong non-oil exporting country, so it may not affect our agricultural products, but reduced demand will affect our crude revenue,” he added.
Already, crude oil prices took a sharp hit on Thursday, with Brent crude dropping below $70 per barrel following an unexpected increase in production by OPEC+.
The CEO, Centre for Promotion of Private Enterprises, Muda Yusuf, highlighted the indirect effects Nigeria might face.
“The Trump administration has practically brought closure to the AGOA trade window. Additionally, the trade war and retaliatory tariffs could trigger inflationary pressures in the U.S., leading to higher costs for imports into Nigeria,” he said.
Yusuf also warned that disruptions in global supply chains could weaken economic growth worldwide, potentially lowering crude oil prices — a development that would reduce Nigeria’s foreign reserves and revenue.
PUNCH
