The United States President, Donald Trump, has announced the enforcement of sweeping tariffs on all goods imported into the country, a move that has placed over N323.96bn worth of Nigerian exports at risk. The policy, tagged the “Universal Baseline Tariff,” imposes a 10% levy on all imported products, with additional reciprocal tariffs for countries considered to maintain unfair trade practices.
While crude oil and energy-related goods are exempted from the new policy, Nigeria’s growing portfolio of non-oil exports to the US may now face steep challenges. Data from the National Bureau of Statistics for 2024 shows that Nigeria earned approximately N4.49tn from the export of crude oil and energy products to the United States.
The country’s non-oil and non-energy exports—worth N323.96bn over the same period—are now subject to the new tariff regime. A breakdown of Nigeria’s quarterly trade performance highlights how the country’s non-oil exports have grown in volume and variety.
- – First Quarter 2024: Non-oil, non-energy exports to the US were valued at N74.79bn, including flours and meals of soya beans worth N28.21bn, urea at N20.33bn, refined lead at N14.40bn, cashew nuts in shell at N11.09bn, and technically specified natural rubber valued at N769m.
- – Second Quarter 2024: Export volume rose to N123.23bn, driven largely by increased demand for urea, which soared to N86.54bn. This was followed by refined lead at N21.88bn, flours and meals of soya beans at N9.44bn, and natural rubber at N4.37bn.
- – Third Quarter 2024: Non-oil exports dipped slightly to N84.38bn. Urea remained the dominant product at N39.20bn, followed by refined lead at N18.94bn. Cocoa beans made their entry into the list of major exports during the quarter, with shipments worth N14.48bn.
- – Fourth Quarter 2024: Nigeria recorded its lowest non-oil, non-energy export figure of the year, with a total value falling to N42.55bn. However, superior-quality cocoa beans led the quarter with N29.92bn.
The newly announced 14% tariff could alter the competitiveness of Nigerian goods in the US market. Urea, which accounted for N146.06bn in total exports during the year, stands as the single largest item at risk.
- – Urea Exports: The fertiliser, produced domestically and exported at scale, may now face reduced orders from American buyers seeking cheaper sources elsewhere.
- – Cocoa Beans: With a total export value of N44.40bn in the second half of the year, cocoa beans are similarly at risk. The product plays a critical role in the global confectionery industry, and the US remains a major destination for Nigerian cocoa.
- – Refined Lead: Refined lead, which earned Nigeria N55.23bn in exports in 2024, could also be affected, as the US continues to promote domestic mining and refining operations.
The Federal Government has acknowledged the adverse impact of the newly imposed tariffs on Nigeria’s oil and non-oil exports, which could potentially disrupt trade relations and affect the competitiveness of Nigerian products in the US market.
Minister of Industry, Trade, and Investment, Dr Jumoke Oduwole responded to the tariff decision, admitting that the policy would undermine the competitiveness of Nigerian goods, especially in sectors reliant on market access and price competitiveness.
While, Minister of Finance and Coordinating Minister of the Economy, Wale Edun said the recent 14% tariff imposed by the US on Nigerian exports will have a negligible effect on the Nigerian economy. He highlighted the comparatively moderate 14% tariff as favourable when placed alongside Vietnam’s 46% and China’s 34% tariffs.
The outcome of the US-Nigeria trade negotiations will be crucial in determining the future of the country’s non-oil exports. The Nigerian government’s efforts to support its exporters through the tariff regime are expected to help mitigate the effects of Trump’s tariffs.