Vehicle price hike looms as US plans 25% tariff

Freight forwarders have said that Nigerian vehicle importers may be spending more following the plans by US President, Donald Trump to impose auto tariffs “in the neighbourhood of 25 per cent” and similar duties on semiconductors and pharmaceutical imports.

According to Reuters on Wednesday, this is the latest in a series of measures threatening to upend international trade.

Trump said the levies on automobiles would come as soon as April 2, “the day after members of his cabinet are due to deliver reports to him outlining options for a range of import duties as he seeks to reshape global trade.”

Trump has long railed against what he calls the unfair treatment of US automotive exports in foreign markets.

“The European Union, for instance, collects a 10 per cent duty on vehicle imports, four times the US passenger car tariff rate of 2.5 per cent. The US, though, collects a 25 per cent tariff on pickup trucks from countries other than Mexico and Canada, a tax that makes the vehicles highly profitable for Detroit automakers,” the report stated.

Reacting to the development, the Head of the Department of Shipping and Terminals of the National Association of Government Approved Freight Forwarders, Mr Nnadi Ugochukwu, said the decision by the US President would definitely affect vehicle importation into Nigeria.

“Yes, it will definitely affect vehicle importation into Nigeria because most of the cars that come into Nigeria are from the US. So if they are buying it higher it means they will be selling it higher to Nigerians,” Nnadi said.

The Reuters report stated that the European Union Trade Chief Maros Sefcovic, would meet with US counterparts – Commerce Secretary Howard Lutnick, Trump’s nominee to be US Trade Representative Jamieson Greer and National Economic Council director Kevin Hassett in Washington on Wednesday to discuss the various tariffs threatened by Trump.

Asked whether the EU could avoid reciprocal tariffs he proposed last week, Trump repeated his claim that the EU had already signalled it would lower its tariffs on US cars to the US rate, although EU lawmakers have denied doing so.

He said he would press EU officials to increase US imports of cars and other products.

Trump also told reporters at his Mar-a-Lago Estate in Florida on Tuesday that sectoral tariffs on pharmaceuticals and semiconductor chips would also start at 25 per cent or higher rising substantially over the course of a year.

The U.S. President did not provide a date for announcing those duties and said he wanted to provide some time for drug and chip makers to set up U.S. factories so that they could avoid tariffs.