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Nigeria to Review Its Trade Strategies Amid US Tariff Threat

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The federal government has initiated a comprehensive review of its trade strategies in response to the recent imposition of a 14% tariff on Nigerian exports by the United States and a possible 50% tariff on European Union goods.

The decision followed a meeting of the Economic Management Team on May 20, chaired by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.

In March 2024, Nigeria’s President, Bola Tinubu, established the Economic Management Team. The team comprises key government officials and industry leaders. In addition, they formulate and implement the administration’s economic plan.

The US Tariff Threat on Nigeria

In April 2025, US President Donald Trump, as part of his reciprocal measures, imposed a 14% tariff on Nigerian exports to the United States as

The Trump administration cited a trade imbalance, stating that Nigeria imposes a 27% tariff on US exports, which they contend disadvantages American businesses.

Additionally, the US government cited Nigeria’s import bans on 25 US goods as justification for the 14% tariff.

The United States has indicated a willingness to impose tariffs on imports from countries it views as engaging in unfair trade practices or posing strategic economic challenges (China).

US-Nigeria Trade

US-Nigeria trade totaled $9.9 billion in 2024. US exports to Nigeria totaled $4.2 billion, while Nigeria’s exports to the US reached $5.7 billion.

The US is Nigeria’s 4th largest trading partner after the Netherlands, Spain, and India in 2023.

Key Nigerian exports to the United States include agricultural commodities (cocoa and sesame seeds), crude oil, and manufactured goods.

Nigeria imports machinery, vehicles, chemicals, pharmaceuticals, and consumer goods.

For Nigeria, the US tariff threat primarily centers on key export sectors, including agricultural products, textiles, and manufactured goods.

Any tariff escalation will negatively impact Nigeria’s export competitiveness, reduce foreign exchange earnings, and disrupt global supply chains.

Read: How Nigeria Can Survive US-China Trade Tensions – IMF DG

Economic Sectors in Nigeria Likely to Be Affected by US Tariffs

President Trump’s 14% tariff on Nigerian goods could hurt several key sectors of the Nigerian economy. Here’s a breakdown of the most vulnerable industries in Nigeria:

Oil & Gas

  • Why?: Despite the increase in US shale production, the US continues to import crude oil from Nigeria.
  • Impact: If the US imposes tariffs on Nigerian crude, it could disrupt one of Nigeria’s largest sources of foreign currency earnings.

Agriculture (Cocoa, Sesame Seeds, Cashew Nuts, etc.)

  • Why?: The US imports Nigerian agricultural products, including cocoa beans, sesame seeds, ginger, and cashew nuts.
  • Impact: Tariffs would reduce competitiveness against other African exporters, leading to lower export revenue and job losses for rural farmers in Nigeria.

Manufacturing (Textiles, Plastics, Footwear, Processed Foods)

  • Why: Exports to the US have surged under the AGOA (African Growth and Opportunity Act).
  • Impact: Tariffs could lead to declines in exports, affecting many micro, small, and medium-sized enterprises (MSMEs) in Kano, Aba, and Lagos.

Government’s Strategic Response

Diplomatic Engagement: The federal government, through the Ministry of Industry, Trade, and Investment, is engaging in talks with the United States. The government aims to negotiate favorable terms that could lead to exemptions or reductions in tariffs.

Market Diversification

Recognizing the need to reduce its reliance on the US market, the federal government is exploring alternative export destinations for exports. Other key markets include

  • African Continental Free Trade Area (AfCFTA): Nigeria could leverage this free trade area to boost intra-African trade.
  • European Union: Utilize the Economic Partnership Agreement (EPA) to increase exports to the bloc.
  • Asia and the Middle East: Explore export opportunities in China, India, Singapore, Indonesia, Vietnam, and the Gulf Cooperation Council (GCC) countries.
  • Americas beyond the United States: Canada, Brazil, and Mexico.

In addition, amid the financial turmoil that followed President Trump’s tariffs, the Central Bank of Nigeria sold nearly $200 million in April to support the naira.

These strategic responses are part of the federal government’s efforts to reposition the Nigerian economy amid mounting global trade challenges.

Impact of US Tariffs on Nigerian Exports

The 14% tariff will harm Nigeria’s export volumes and revenues as exports become more expensive and less competitive compared to those of other countries without such tariffs.

The tariff will particularly affect key Nigerian exports like crude oil, agricultural products, and manufactured goods.

Consequently, it would lead to lower demand for Nigerian goods in the US. Reduced demand could hurt Nigeria’s foreign exchange inflows and supply chains.

Nigeria benefits from duty-free access to the US market under the African Growth and Opportunity Act (AGOA). Aggressive US tariff policy may signal a shift away from preferential trade, putting Nigerian exports at risk if AGOA is scaled back or not renewed beyond 2025.

US Tariffs on Nigerian exports can disrupt global supply chains. Countries that are dependent on Nigerian raw materials may face shortages or increased costs, which can ripple through international markets.

Emerging markets, such as Nigeria, which heavily rely on exports to large economies, face challenges in maintaining growth and diversification.

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