According to Johnson Chukwu-led fund managers at Cory Assets Management Limited, Nigeria may strengthen trade ties with China, the European Union, and the BRICS nations (Brazil, Russia, India, China, and South Africa) to offset the negative impact of US tariffs.
This strategic shift could reshape Nigeria’s global trade landscape and foster economic cooperation with emerging markets.
For instance, the tariff on Nigerian exports by the United States poses a significant threat to the African Growth and Opportunity Act (AGOA) framework, a trade pact aimed at promoting economic cooperation between the US and sub-Saharan African countries.
The tariff hike could undermine the benefits of AGOA, which has facilitated duty-free access to the US market for eligible African countries, including Nigeria.
U.S. total goods trades with Nigeria were $9.9 billion in 2024. U.S. goods exports to Nigeria in 2024 were $4.2 billion, up 61.4 percent ($1.6 billion) from 2023. U.S. goods imports from Nigeria in 2024 were $5.7 billion, up 0.1 percent ($7.0 million) from 2023. The U.S. goods trade deficit with Nigeria was $1.5 billion in 2024, a 50.9 percent decrease ($1.6 billion) over 2023 according to the office of the United States trade representative.
This development may compromise the competitiveness of Nigerian exports, particularly in the textile and manufacturing sectors, and potentially jeopardize the country’s $1.5 billion trade surplus with the US.
The U.S. President Donald Trump announced a 14 percent tariff on imports from Nigeria, as part of a sweeping protectionist policy targeting multiple countries. The initiative includes a baseline 10 percent tariff on all imports into the United States, with steeper rates imposed on specific nations. The White House claims the move is designed to correct trade imbalances and bolster domestic manufacturing.
However, the policy has sparked widespread concern over its implications for international trade and diplomatic relations.
At the heart of these concerns lies the African Growth and Opportunity Act (AGOA), which since 2000 has granted duty free access to the U.S. market for eligible Sub-Saharan African countries, including Nigeria.
The newly imposed tariffs place the future of this trade framework in jeopardy.
Nigeria, a major AGOA beneficiary, has used the preferential access to expand its exports in apparel, agricultural produce, and select manufactured goods. Now, that progress stands threatened.
The announcement has already roiled financial markets, triggering a wave of volatility across major U.S. stock indices.
Economists warn that the tariff escalation could undermine global economic growth, raise consumer prices, and provoke retaliatory actions from affected nations. Indeed, both the European Union and China have hinted at potential countermeasures, fuelling fears of a broader trade war. Nigeria, Africa’s largest economy and a longstanding trade partner of the United States, is particularly exposed to the fallout.
The fund managers in an e-mailed response noted that, “The bilateral relationship spans crude oil, agricultural goods, machinery, vehicles, and services”.
In 2024, Nigeria’s exports to the U.S totalled N5.52 trillion, while imports—largely crude oil, butanes, and used vehicles— from Nigeria stood at N4.07 trillion, according to the National Bureau of Statistics.
These figures have historically fluctuated in response to oil prices, shifts in U.S. energy policy, and domestic economic conditions.
As global trade dynamics shift under this new wave of U.S. protectionism, the resilience of Nigeria’s economy will be put to the test.
“We think that President Trump’s 14 per cent reciprocal tariff has cast a shadow over the stability of this trade partnership. While the move is framed as a strategy to safeguard American industry, it risks triggering broader friction, especially if Nigeria responds by exploring alternative trade alliances with China, the European Union, or BRICS countries.
“Beyond trade, U.S. investment in Nigeria spans vital sectors including oil, technology, and finance. American giants such as Chevron, ExxonMobil, and Microsoft maintain a strong presence in the Nigerian market. But growing trade tensions could dampen investor confidence and strain diplomatic ties unless carefully managed,“ the analysts stated.
From a macroeconomic perspective, the imposition of the tariff threatens to exacerbate Nigeria’s existing vulnerabilities. Reduced export earnings, particularly from non-oil sectors, could diminish foreign exchange inflows, heightening pressure on the naira.
This could deepen Nigeria’s foreign exchange liquidity crisis, potentially forcing the Central Bank to deplete its already stretched reserves or tighten currency controls.
According to Cowry Assets Management analysts, inflation is also likely to accelerate, as Nigeria may be compelled to source critical imports like wheat, pharmaceuticals, and industrial machinery from more expensive markets. This would elevate input costs, worsen food inflation, and erode purchasing power.
“On the geopolitical front, the tariff may prompt Nigeria to recalibrate its foreign policy—deepening ties with alternative partners such as China, the European Union, and the BRICS bloc. It may also look inward, seeking stronger regional cooperation within ECOWAS and the African Union to establish new trade corridors and collective negotiation frameworks,“ they warned.
The Centre for the Promotion of Private Enterprises (CPPE) said that the recently introduced tariffs by the United States President Donald Trump would dampen global growth outlook and lead to a decline in oil price which could impact Nigeria’s foreign reserves and revenue.
In a statement sent to the Nigerian Tribune at the weekend, Director/Chief Executive Officer of the CPPE, Dr. Muda Yusuf said that the trade war could throw new opportunities for new trade partners globally for emerging economies, with many countries that are victims of the trade war seeking new bilateral trade relationship which may create opportunities for Nigerian investors.
