US President Donald Trump has approved a 14 percent reciprocal tariff on all Nigerian goods entering the United States as part of a new global trade policy, which also impacts 184 other countries. This move is part of the much-anticipated “Liberation Day” tariffs.
The new tariff structure mandates that countries will face a tariff rate at half the level they charge the US, with a minimum rate of 10 percent. This includes non-monetary trade barriers and currency manipulation. According to Trump, Nigeria’s 27 percent tariff on US goods has prompted the imposition of a 14 percent tariff on Nigerian exports.
The new tariffs, affecting 185 countries, have ended months of uncertainty that negatively impacted markets in the US, Europe, and Asia. These measures are part of an escalating trade war that also includes plans to impose 25 percent tariffs on all foreign-made vehicles this week.
Trump stated that while he could have imposed full reciprocal tariffs, he decided to ease the impact on countries that might struggle with such increases, describing the moves as less severe than they could have been.
In addition to the 14 percent tariff on Nigeria, a 10 percent baseline tariff will be levied on imports from all countries, with higher rates imposed on what Trump called “bad actors.” For instance, Lesotho faces a massive 50 percent tariff on exports to the US.
Commenting on the impact of the tariffs, David Adonri, Vice Chairman of Highcap Securities, noted that American consumers might bear the brunt of the tariff increase, particularly if Nigerian goods have a high price elasticity of demand. However, he suggested that the tariffs might not significantly affect Nigeria’s export volume, as much of Nigeria’s exports to the US are tropical agricultural products. He also pointed out that US trade with Nigeria is not substantial enough to cause major disruption.
Adonri further mentioned that with the increasing importation of crude oil by Dangote Refinery, the trade balance could now shift in favor of the US, but the real impact will depend on consumer demand.
Full List of African Countries Affected by Trump’s New Tariffs:
- Botswana – 37%
- South Africa – 30%
- Tunisia – 28%
- Côte d’Ivoire – 21%
- Egypt – 10%
- Morocco – 10%
Although Nigeria and other African nations are not on Trump’s supplementary list, the 10 percent baseline tariff still applies to their imports.
In 2022, Nigeria was the second-largest US export destination in Sub-Saharan Africa. The new tariffs may significantly impact Nigeria’s trade relationship with the US, especially considering the country’s large exports of agricultural goods.