Exporters divided over Trump tariff’s effects on Nigeria

Nigerian exporters’ outlook remains mixed as exporters weigh the potential ripple effects the United States’ recently announced and newly paused tariffs would have on global market competitiveness, especially of non-oil exports.

Stakeholders fear the recent global trade moves could either leave Nigerian products vulnerable to a downturn in demand or be the exact opposite, hoping for a strengthening of trade relations outside the US.

The Secretary of the Manufacturers Association of Nigeria Export Promotion Group, Dr. Benedict Obhiosa, in a virtual interview with The PUNCH, warned that higher tariffs triggered by the US often come with a global chain reaction.

“Whenever there is an imposition of higher tariffs by a major trading partner, it is often a call for concern,” Obhiosa said. “There are speculations that other major export destination countries of Nigerian products in Europe and Asia may toe the route. Should that be the case, it will hugely impact negatively on the Nigeria non-oil export volume for the remaining part of the year, except something urgent is done about it.”

US President Donald Trump paused his ‘Reciprocal Tariffs’, including Nigeria’s 14 per cent for 90 days on Wednesday shortly after they went into effect.

However, fears of an escalating trade war persist as the US maintains tariffs on China, stating intentions to increase them to 104 per cent after China retaliated by announcing tariffs of 84 per cent on all US imports.

Although Nigeria’s direct trade with the US is relatively low, and for the duration of the three-month pause, tariffs sit at a baseline of 10 per cent, Nigerian exporters may suffer slight collateral damage in markets where the US holds influence, according to the MANEG secretary’s analysis.

Dr Obhiosa said exporters were already considering new strategies to stay afloat. “One possible strategy is how to now begin to consider other markets where they can sell their products besides the US,” he noted. “Obviously, from the tariff imposition, exporters from Nigeria will not be competitive, especially considering the high cost of production, infrastructural deficiency, and exchange rate fluctuation in our domestic economy.”

The MANEG secretary’s comments come amid a recent statement by the United States Trade Representative’s Office, which cited Nigeria’s import restrictions on food and pharmaceuticals as a barrier to US exporters. In response, MANEG advised the Federal Government to take urgent diplomatic steps.

“Our advice would be that the Nigerian government should have a roundtable with the US government on the imposition for a rethink of their action,” Obhiosa remarked. “Crude oil export to the US market will also be affected. That would help to pave the way for the exporters who are playing in the non-oil export sector as well.”

Meanwhile, the President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, offered a contrasting view, describing the development as a potential opportunity for Nigeria.

“Nigeria’s trade with the USA is minimal, so the Trump tariffs will not impact the country severely,” Idahosa told The PUNCH. “The ripple effects are not going to be negative but more likely to be positive.”

The LCCI president observed that global suppliers are now seeking alternative destinations for their goods and are increasingly turning their attention to Africa.

“Yesterday, Sweden opened their trade office in Lagos. Switzerland, Poland, and a couple of countries are already positioning to increase their sales of goods and services to Nigeria,” he disclosed. “Because they see there is a market there… they are now going to pay a lot more attention.”

He noted that the current global realignment could benefit Nigerian exporters willing to pivot to previously underutilised markets. “We are going to put more effort into exporting to Canada, to Australia, to Japan, to India—other countries,” Idahosa added.

While affirming the Federal Government’s diplomatic approach, Idahosa pointed out that authorities are treading cautiously in response to the US tariffs.

“The Nigerian government is going through a strategic process,” he remarked. “They have reported to the World Trade Organisation to say what America has done is against WTO principles… But at this time, the government is not willing to impose any retaliatory tariff.”

Stakeholders now await further developments as the US administration begins a 90-day pause, with negotiations underway to de-escalate potential trade wars.