President Donald Trump is set to announce new tariffs today April 2, 2025, dubbed “Liberation Day” tariffs, which may significantly impact Nigeria’s exports to the United States.
Reports indicate that these tariffs could include a blanket 20% levy on all foreign goods entering the U.S., effective immediately.
Nigeria has substantial trade relations with the U.S., primarily driven by crude oil exports.
According to the National Bureau of Statistics (NBS), in the nine months ending September 2024, Nigeria exported goods worth N4.59 trillion to the U.S., with crude oil accounting for N1.494 trillion and non-oil exports totaling N194.99 billion. This made the U.S. Nigeria’s second-largest export destination during that period.
Conversely, imports from the U.S. stood at N2.999 trillion, resulting in a trade surplus of N1.59 trillion in Nigeria’s favour.
The proposed tariffs could have profound economic implications for developing countries like Nigeria.
A blanket 20% tariff would likely make Nigerian exports less competitive in the U.S. market, potentially reducing demand and foreign exchange earnings. This is particularly concerning for Nigeria, where crude oil exports constituted 82.5% of total exports in Q3 2023.
Economists warn that such tariffs may lead to increased prices for imported goods in the U.S., potentially decreasing consumer demand and adversely affecting exporting countries.
The White House projects that these tariffs could generate $600 billion in annual revenue.
Trade experts express concern over the potential for a global trade war, as affected countries may implement retaliatory measures. The European Union, for instance, is preparing counter-tariffs on U.S. products.
While Nigeria has not been specifically targeted, the broad nature of the tariffs means its exports will be affected.
“To mitigate these challenges, it is imperative for Nigerian policymakers to explore strategies to enhance the competitiveness of Nigerian exports, such as improving product quality, diversifying export products, and seeking alternative markets,” a trade expert, Ayotunde Johnson, said.
He emphasized the need for Nigeria to engage in diplomatic channels to negotiate favourable trade terms with the U.S.
He said the impending “Liberation Day” tariffs underscore the interconnectedness of global trade and the vulnerability of developing economies to policy shifts in major markets.
“Nigeria must proactively address these challenges to safeguard its economic interests,” Johnson added.
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