The newly imposed 14 per cent tariff by U.S. President Donald Trump on exports by Nigerian businesses presents a significant risk to the $10 billion 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 U.S., 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 (AGOA) in 2000, Nigeria had exported an estimated $277 billion worth of goods to the United States, with crude taking the majority.
Nigeria’s exports to the United States currently average between $10 billion and $12 billion annually, although it has been fluctuating in recent years, according to U.S. and Nigeria trade data.
Trump had announced in a decision widely condemned by the European Union and exporting nations that countries seeking to sell goods to the United States would now face taxes as high as 50 per cent.
The announcement, made during a “Make America Wealthy Again” event in the Rose Garden, marked a dramatic shift from decades of free-trade orthodoxy that had underpinned the global economy since World War II.
He said the new sweeping tariffs of at least 10 per cent on all countries were part of a broader strategy aimed at rebalancing global trade and addressing perceived unfair trade practices.
According to the Trump administration, Nigeria imposes a 27 per cent tariff on U.S. exports, a disparity they claim has long been detrimental to American businesses and consumers. It said the higher tariffs were charged through currency manipulation and trade barriers.
Our correspondent gathered that the reciprocal tariff was calculated based on the trade deficit for the U.S. in goods with the particular country divided by the total goods imports from that country, and then divided that number by two. A trade deficit occurs when a country buys (imports) more physical products from other countries than it sells (exports) to them.
In his address, Trump framed the tariff as part of a larger initiative to protect American industries and ensure that other nations play by what he described as “fair” trade rules.
Trump declared the start of what he called a new era of “fair trade,” promising to “supercharge America’s industrial base” and force open foreign markets long accused of shutting out U.S. goods.
