The newly imposed 14 percent tariff by US President Donald Trump on Nigerian exports poses a major threat to the $10bn annual trade between the two nations, potentially disrupting key sectors such as oil and agriculture. Trade associations and economic experts warned on Thursday that this could escalate into a global trade war.
Experts caution that the policy will raise the cost of goods and services, weaken living standards, slow manufacturing, hinder international trade, and reduce US demand for Nigerian oil, one of its key markets. They predict a significant decline in Nigeria’s oil earnings following the new tariff regime.
Sheriff Balogun, President of the Nigerian-American Chamber of Commerce, noted that since the launch of the African Growth and Opportunity Act (AGOA) in 2000, Nigeria has exported approximately $277bn worth of goods to the US, with crude oil dominating the trade.
Nigeria's annual exports to the US range between $10bn and $12bn, fluctuating in recent years. Trump’s decision, widely condemned by the European Union and exporting nations, includes tariffs as high as 50 percent on goods entering the US.
Speaking at a 'Make America Wealthy Again' event in the Rose Garden, Trump announced sweeping tariffs of at least 10 percent on all countries. The move, aimed at rebalancing global trade, represents a dramatic shift from decades of free-trade policies that have shaped the global economy since World War II.
The Trump administration argues that Nigeria imposes a 27 percent tariff on US exports, which they claim has long harmed American businesses and consumers. The White House also accuses Nigeria of using currency manipulation and trade barriers to maintain the imbalance.
Our correspondent learned that the reciprocal tariff was calculated based on the trade deficit the US has with a country, divided by total goods imported from that country, and then divided by two. A trade deficit occurs when a nation imports more physical products than it exports.
Trump framed the tariff as a strategy to protect American industries and enforce fair trade rules. “This is one of the most important days in American history,” he said. “We will supercharge our domestic industrial base, open foreign markets, and break down trade barriers. More production at home will lead to stronger competition and lower consumer prices.”
Responding to the announcement, NACC President Balogun warned that the policy could impact trade worth $277bn. “Since AGOA began, Nigeria has exported an estimated $277bn worth of goods to the US, primarily crude oil,” he noted.
Experts say the tariffs threaten Nigeria’s exports, particularly petroleum products, which form the bulk of its trade revenue. A decline in oil sales could further weaken the naira and increase inflation. Additionally, reciprocal tariffs on US exports like wheat and vehicles may drive up local prices, adding financial strain on businesses and consumers.
Afreximbank research indicates that the 14 percent reciprocal tariff will lower oil demand and reduce forex earnings. Higher tariffs on wheat and vehicles could also increase local prices. Nigeria's main exports to the US include crude petroleum, petroleum gas, nitrogenous fertilizers, cocoa, rubber, and refined lead, while key imports from the US include cars, refined petroleum, and wheat.
The National Bureau of Statistics reports that US-Nigeria trade reached N31.1 trillion between 2015 and 2024, with N16.4 trillion in exports and N14.71 trillion in imports, creating a trade surplus of N1.64 trillion. Exports fluctuated over the years, peaking at N5.52 trillion in 2024.
The tariffs 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.
Johnson Chukwu, CEO of Cowry Asset Management Limited, noted that crude oil exports from Nigeria may remain unaffected, as Trump has exempted tariffs on energy products like crude oil, copper, and gold. However, agricultural exports could suffer. “Nigeria is not a major non-oil exporting nation, but the concern is that reduced global production could lower crude demand, bringing down oil prices and affecting Nigeria’s revenue projections,” he warned.
