Trump Tariffs: Nigeria Faces Lower FX Earnings, Higher Tariffs on Wheat, Cars

By Adedapo Adesanya

President Donald Trump on Wednesday imposed reciprocal tariffs on imports from all countries of the world.  This has been regarded as the biggest shake-up in the international trading system in decades and has the propensity to significantly affect trade.

According to the US government, there will be a baseline levy of 10 per cent on all imports and far higher tariffs on many key trading partners.

The Trump administration said, “For years, hard working American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense.”

Nigeria, a key trade partner of imports and exports, faces 27 per cent in US tariffs and a 14 per cent reciprocal tariff.

Giving a breakdown of how this may impact countries particularly on the continent, African Export and Import Bank (Afreximbank) in a research published on Thursday noted that these tariffs could reduce export revenues, increase production costs, and disrupt investment flows, particularly for nations heavily reliant on US trade.

For Nigeria, it could affect some key exports like crude oil, cocoa, and rubber as well as impact imports like wheat, refined petroleum, and vehicles.

In the fourth quarter of 2024, the US was Nigeria’s fourth top trading partner by import as it carried out 6.4 per cent of its total imports from the US, according to the National Bureau of Statistics (NBS) valued at N1.055 trillion.

As a result of this relationship, this development could lead to challenges such as reduced oil demand which could lower the country’s foreign exchange earnings.

It could also lead to higher tariffs on wheat, which translates to Nigerians facing higher cost of food particularly bread, noodles, and pastries.

Imported vehicles are not exempt, as the cost of buying cars will increase as importers look to cover their profit margins.

“Impact: Reduced oil demand could lower forex earnings, while higher tariffs on wheat and vehicles could raise local prices,” it said in a post published on X (formerly Twitter).